N Chandrasekaran, chairman, Tata Sons, said: "The merger of Vistara and Air India is an important milestone in our journey to make Air India a truly world-class airline." He said the company is excited about the opportunity of creating a strong Air India, which would offer both full-service and low-cost services across domestic and international routes.

In the past, Air India has unveiled a wide-ranging transformation programme to strengthen its foundations and revamp its operations, setting it on the road to recovery and positioning itself for growth.

Air India will benefit from Vistara's operational capabilities and customer base. In total, Tata group-owned Air India, including Air India Express and AirAsia India, and Vistara have a total of 218 wide-body and narrowbody aircraft, serving 38 international and 52 domestic destinations.

Domestic market leader IndiGo, which holds a 56.7% share in the domestic aviation market, operates 280+ aircraft. IndiGo has a total destination count of 100, with 74 domestic destinations and 26 international. Air India's October market share stood at 9.1%, while that of Vistara's was at 9.2%. AirAsia's market share stood at 7.6%, as per the latest available data for October.

After the merger, Air India will be the only Indian airline group to operate both full-service and low-cost passenger services. It'll also be able to optimise its route network and resource utilisation, which will help it tap demand across market segments.

India is the world's third-largest aviation market. Demand for air travel is surging with passenger traffic expected to more than double over the next 10 years, supported by rising income levels and ongoing investments in its aviation infrastructure. The country also offers huge opportunities in the aviation space as it remains underserved with low international seats per capita.

Vistara merger with Air India

Singapore Airlines, Tatas to merge Vistara with Air India