With Air India privatization, the biggest speculation that churned the internet was about the possible merger of Vistara with Air India. Putting an end to the rumour mill, Tata Singapore Airlines Chairman Bhaskar Bhat confirmed that no such strategic merger talks are in place.
In an interview given ET, Bhat said that Tata Group targets to run Air India as a parallel entity alongside Vistara. According to him, any talk on the merger is premature at this phase. “Vistara will continue to target to deliver good customer experiences. To say anything beyond that will be speculation. Should Air India and Vistara merge is not an answer I can give. The merger is a strategic subject and best resolved between joint venture partners,” he said.
Vistara is a joint entity between Tata Group and Singapore Airlines. Tata owns the majority stake in the airline at 51%, with the remaining 49% held with SIA. Tata Group last week took over India’s national carrier Air India.
According to Bhat, Tata Group will not make Air India a success at the cost of Vistara. The duo’s operations will remain separate without hurting each other. Bhat sees the revival of Air India as beneficial to India’s aviation sector. A booming industry will pave the way to more resources and better investment opportunities. “It is a growth for everyone,” he said.
Air India’s single aviation entity will be a long-term plan
Industry experts predicted the creation of a unified aviation company in the long term from Tata Group by merging all its aviation wings into a single entity. By bringing operational efficiency into a single entity, Air India would be well-structured to compete in the marketplace. However, the structure of Air India is likely to remain untouched for one year or until its stabilization.
Meanwhile, Vistara will continue to focus on growth, grabbing the opportunities and doing what the airline has to do. “We cannot get confused in our focus till we are separate entities,” Bhat said in the interview.
“For now, concerns are about our profitability, and our focus continues to be cash conservation. We see Air India as a big opportunity for the sector, and Air India takeover has been one of the admirable milestones in the aviation industry,” Bhat added.