Vistara brand to cease in November as airline merger proceeds

India cleared the last roadblock to national carrier Air India Ltd.’s merger with smaller rival Vistara, approving a S$360 million ($276 million) investment by Singapore Airlines Ltd. into the new combined carrier.

The deal paves the way for the operational merger of planes, staff and routes. Air India expects to complete the merger with Vistara by the end of the year, Singapore Airlines said in a filing Friday. The Singaporean carrier, which jointly owns Vistara with the Tata Group, will hold a stake of about 25.1% in the enlarged Air India Group.

The Air India-Vistara merger, more than 18 months in the making, adds to a wave of industry deals, with Air France-KLM taking a 19.9% stake in SAS AB this week while Deutsche Lufthansa AG secured a €325 million ($360 million) investment in Italy’s ITA Airways in July.

Ongoing airline transactions include Alaska Air Group Inc.’s and Hawaiian Holding Inc.’s $1.9 billion merger, and Korean Air’s $1.4 billion bid for smaller rival Asiana Airlines Inc. Not all proposed deals have succeeded however, with US carriers JetBlue and Spirit abandoning a $3.8 billion pact and IAG SA terminating a bid to take over Spain’s Air Europa.

The Indian merger will give Singapore Air greater exposure to one of the world’s fastest-growing travel markets and make it the only foreign player to have a significant stake in one of the country’s airlines.

Vistara said in a statement that starting Sept. 3, customers will progressively no longer be able to make bookings with Vistara for travel on or after Nov. 12.

“All Vistara aircraft thereafter will be operated by Air India and bookings for the routes operated by these aircraft will be redirected to Air India’s website,” Vistara said.

The deal also widens Singapore Air’s reach beyond its smaller home market, with its reliance on international travel hurting the company during the Covid-19 pandemic. The carrier has wrapped up a flurry of tie ups in recent years including joint-venture deals with neighbors Malaysia Airlines and more recently Garuda Indonesia. It is also seeking a similar pact with Japan’s All Nippon Airways.