Vistara bids farewell, IndiGo goes upscale in airlines shake-up

India's airlines are set for a landmark week, with two milestones days apart, that will redefine the competitive landscape in one of the world's fastest-growing aviation markets.

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Vistara - jointly owned by Tata Sons and Singapore Airlines (SIA) - operates its final flight on Nov 11 before its planned merger with Air India kicks in the following day, marking the end of a complex and messy two-year process. SIA will hold a 25.1 per cent stake in the enlarged Air India post-merger.

On Nov 14, market leader IndiGo, operated by InterGlobe Aviation, debuts its business-class cabins on select routes as it ventures beyond budget travel for the first time.

The two developments mark major changes for India's two largest airlines as the carriers expand and make forays beyond their traditional areas of expertise.

By folding Vistara into the much larger but unprofitable Air India, the Tata Group has taken on one of the most complicated aviation mergers globally, including navigating pilot protests that led to dozens of cancelled flights in 2024.

The union will be a crucial test of the coffee-to-cars conglomerate's ability to improve the quality of Air India's services and turn around the loss-making carrier it bought from the Indian government in 2021, without losing the brigade of loyal Vistara fliers.

The challenge for the no-frills IndiGo, meanwhile, will be to revamp its image - it is like India's Ryan Air - and dent Air India's supremacy in the premium sector.

"All the jabs that Air India and IndiGo are taking are aimed at each other's strategy," said Mr Ajay Awtaney, founder of LiveFromALounge.com, a local aviation analysis platform. "It's now a two-player game."