Aravind Parasuram’s Post

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Photographer & Media Producer | Aspirant Digital Media Business Developer | Jindal School of Journalism and Communication'24 | Ex Intern : Felis Creations & Carrot Films

Air Vistara recently ceased operations as part of its merger with Air India. But why did a well-performing airline decide to cease operations ? The Tata Sons group and Singapore Airlines entered a joint partnership to launch a new full-service airline back in 2013, officially starting Vistara in 2015. The airline's main target audience was corporate and business travellers commuting across major cities in India. In 2021, the Government of India invited bids to privatize the state-run airline, Air India, due to financial challenges and mounting debts. The Tata Group, which already owned two airlines (Vistara and AirAsia India), successfully won the bid and re-acquired Air India (which had originally been under Tata ownership from 1932 to 1945). The acquisition of Air India also included its low-cost subsidiary, Air India Express. With this, the Tata Group held stakes in four airlines—two full-service carriers (Air India and Vistara) and two budget carriers (Air India Express and AirAsia India). The airline industry is one of the toughest businesses to sustain, requiring complex management of various aspects. To streamline operations, the Tata Group decided to merge Vistara with Air India in the premium segment and AirAsia India with Air India Express. By merging the airlines, the Tata Group can manage assets and resources more efficiently, covering aircraft, ground services, crew, and airport facilities. This consolidation also strengthens their overall market share in the aviation sector. Vistara had built strong brand value, known for its premium cabin and in-flight services. On coming across a X thread ( former twitter ) by FinFloww, the Tata group decides to stick to the Air India given the historical significance of the airline in India, and being the global pioneer of luxury air travel in the 1970s and 1980s. Hopefully, the next phase of Air India will match or surpass the service quality that Vistara was known for. #Aviation #BusinessCaseStudy #AirIndia #Vistara #TataGroup

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