Soaring Ambitions: India’s Unfolding Airlines Story

The merger brings together Air India’s extensive route network and operational experience with Vistara’s reputation for premium service. Together, they aim to modernise the fleet, improve service standards and establish an international brand that can compete with global carriers like Emirates and Singapore Airlines. Singapore Airlines will hold a 25.1 per cent stake in the merged entity, supporting Tata’s ambitions with both strategic insight and operational expertise.

The consolidation aligns with Tata’s broader vision of transforming Air India from a debt-laden national carrier into a competitive and profitable airline. It also reduces market fragmentation, allowing the combined entity to optimise routes, pricing and customer service. By leveraging Vistara’s service quality and Air India’s network strength, Tata Group hopes to enhance passenger experience, appeal to international travellers, and reclaim Air India’s legacy as a world-class airline. The merger is seen as a key move in positioning India’s aviation industry on the global stage and driving growth in one of the world’s fastest-growing aviation markets.

This is a far cry from the pre-Liberalisation era, when the Indian State ran aviation for decades. 

Maharaja Takes To The Air

India’s romance with flying began when Tata Air Service was founded by the late JRD Tata in 1932. After Independence, it adopted the name Air India. 

Air India launched its first international flight from Mumbai to London in 1948. Over the next two years, several smaller airlines came into existence in different parts of the country, such as Deccan Airways and Kalinga Airways.

But not for long. The Government of India nationalised aviation in 1953 and took over all eight private airlines and merged them into two: Air India and Indian Airlines. These two ruled the Indian skies for 40 years by operating international and domestic routes respectively. A third public carrier, Vayudoot, came into being in 1981, to connect smaller towns. It stopped operations in 1997 due to heavy losses and inadequate infrastructure.

After the 1991 economic liberalisation ushered in by the P V Narasimha Rao government, rules for airlines licenses and operations were relaxed. Soon, many business groups and private companies jumped into the fray. These included Kingfisher, Modi Group, Sahara Group, etc.

Till the early 2000s, only the affluent could afford to fly. But since then, India has seen tremendous growth in the airlines sector. With more people choosing air travel, the total traffic in FY 2023-24 stood at 153.4 million passengers, and is expected to touch 500 million by 2030, a feat surpassed only by the USA and China.

First Movers After Liberalisation 

Modiluft: The Modi Group launched the airline in a technical venture with Lufthansa of Germany, but it had to shut down in 1996 after a fiscal crunch. 

East-West Airlines: East-West Airlines was started in 1994 by Maulana Takiyuddin Wahid, who was murdered in Mumbai the very next year. After his death, a collapse brought about by operational and management problems forced it to sell out. Jet Airways bought it in 1996.

NEPC Airlines: Founded in 1993 with a fleet of Boeing 737 and Fokker aircraft by the NEPC Group, this Chennai-based airline faced serious financial losses due to mismanagement, and shut down in 1997.

Damania Airways: Founded in 1993, Damania Airways became unviable due to high fuel prices and intense competition and was shuttered in 1997. 

Air Sahara: The Sahara Group of Lucknow started Air Sahara and operated both domestic and international flights. Some years after it began international operations in 2003, the company faced financial trouble and was sold to Jet Airways in 2007.

Jet Airways: With hubs at Mumbai, Delhi, Chennai and Brussels, Jet Airways, launched in 1993. It was one of India’s largest airlines for a while. Within the subcontinent, it operated an extensive domestic and regional network. It also operated services to Europe, the Middle East, Southeast Asia and North America. Due to financial pressure, Jet Airways suspended all operations from April 2019. Recently, the Supreme Court ordered its liquidation, bringing a storied-innings in Indian aviation to an end.

Fresh Influx After 2002

Despite a very high mortality rate, for a while, India's aviation industry continued to grow. After the early 2000s, another wave of airlines entered the skies: The low-cost Air Deccan, followed by Go Air, Indigo, SpiceJet and Kingfisher Airlines.

Air Deccan: Captain G R Gopinath started Air Deccan in 2003 as a low-cost carrier with its maiden flight from Bengaluru to Hubli. Within two years, Air Deccan was operating several routes, both international and domestic. In 2007, Capt Gopinath sold out and the airline merged with Kingfisher Airlines.

SpiceJet: In 2004, the erstwhile Modiluft was acquired by Ajay Singh, who relaunched it as the low-cost carrier SpiceJet. Its first flight was from Delhi to Mumbai on May 24, 2005. By mid-2008, it was India's third-largest carrier in terms of market share. 

IndiGo: Rahul Bhatia of InterGlobe Enterprises and Rakesh Gangwal, the former CEO of US Airways, founded the airline in 2006. It began operations on August 4, 2006. By December 2010, IndiGo had replaced state-run Air India as the third largest airline, after Kingfisher and Jet. It is now India's largest airline.

Kingfisher Airlines: Owned by the now-fugitive liquor baron Vijay Mallya, Kingfisher was based out of Mumbai. It was one of India's largest domestic airlines, serving over 55 cities in India, and international destinations as well. It ceased operations in October 2012, after the Directorate General of Civil Aviation suspended its license. 

Go First Air: Previously known as Go Air, Go First went bust last year. Founded by the Wadia Group, Go Air began in 2005 as another Mumbai-based low-cost carrier. Beginning operations on November 4, 2005, it ceased flying on May 3, 2023 and filed for bankruptcy. The insolvency process is still on, with no buyer in sight.

Air India Express: It came into existence on April 29, 2005. Launched as a low-cost carrier on short-haul international routes in the Middle East and Southeast Asia, especially for Indian expatriates, its objective was to counter the emergence of other LCCs.

Air Asia: Air Asia India was founded as a joint venture between Tata Sons and AirAsia Bhd in June 2014. AirAsia Bhd gradually sold its share to Tata Sons. In December 2022, after all AirAsia India shares were acquired by Tata Sons, the airline was renamed AIX Connect, before being merged with Air India Express in 2024, after the Tatas bought Air India.

Vistara: Vistara was a full-service domestic airline based out of Delhi. A joint venture between Tata Sons and Singapore Airlines, it began operations in January 2015. With Air India back in the Tatas' hangar, Vistara on August 30, 2024 announced that it would not take new bookings from September 3 onwards. Its fleet has conseqently now been merged with Air India as of Tuesday.

Akasa Air: Founded by former aviation professionals Vinay Dube, Aditya Ghosh and now-deceased deep-pocket investor Rakesh Jhunjhunwala, Akasa Air is the newest low-cost carrier, again headquartered in Mumbai. It began operations with its first flight from Mumbai to Ahmedabad on August 7, 2022. It has 25 aircraft and flies to 27 destinations