Summary
- Air India CEO says that the integration of four airlines under the Tata Group into two is unprecedented.
- Some of the challenges in the merger process include employee transitions and operational procedures.
- The top boss says the merger could be finalized by the end of this year.
Soon after Air India was acquired by the Tata Group in 2022, talks about its eventual merger with Vistara began swirling around. The Indian conglomerate currently manages four airlines: Air India, Vistara, AIX Connect, and Air India Express. While AIX Connect and Air India Express will merge to form a bigger low-cost airline, Air India and Vistara will integrate business to form a consolidated full-service carrier. And according to Air India’s CEO, the merger could be finalized this year itself.
Unprecedented aviation merger this year
Air India’s CEO Campbell Wilson has said that the enormous task of merging four airlines under the Tata Group into two could be completed by the end of this year. At a roundtable discussion at the Farnborough International Airshow, Wilson said,
“The challenge of merging four airlines into two, concurrently, is probably unprecedented in aviation. There are the competition and legal clearances, then we have to merge all the operating practices, procedures and manuals, and train all the staff. It’s a very long and convoluted process, but we’re hoping that by the end of this calendar year we’ll be able to complete both mergers.”
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Following the merger, the Tata Group will have two airlines—a full-service carrier, Air India, and its low-cost arm, Air India Express. Aviation Week Network says that Wilson highlighted the importance of India’s aviation potential, saying that there were just 43 widebody planes for a country of 1.4 billion people. In contrast, Singapore has 150 widebody planes for five million residents.
Business integration
Of course, the merger comes with its own set of challenges, such as integrating thousands of employees and a transition of working culture as well. Recently, it was reported that 300 staff members could face unemployment following Air India and Vistara’s merger.
The teams overseeing the merger are also evaluating the experience and performance of the employees and trying to figure out where and how they fit in the merged entity. As per the latest reports, around 300 fixed-term contract employees may not have their contracts renewed. However, Air India’s top executives are likely to retain their roles.
Photo: Abdul N Quraishi – Abs | Shutterstock
Mergers like these also require several regulatory approvals, including getting the go-ahead from competition authorities. Earlier this year, Singapore approved the Air India-Vistara merger, with the Competition and Consumer Commission of Singapore (CCCS) agreeing to it with certain terms and conditions.
Vistara brand to discontinue
Vistara has become a much-loved full-service airline in India over the last few years. It has many loyalists who are also sad to find out that the Vistara brand will cease to exist after the merger. The decision to retain Air India’s branding was due to the fact that the airline has greater overseas recognition and is better placed to be a world-class international airline in the future.
Photo: Eliyahu Yosef Parypa | Shutterstock
However, it has been said that several operational procedures and processes of Vistara will be adopted by Air India as it embarks on its journey forward. It remains to be seen how the new airline will shape up following the business integration.
Related
Vistara Brand To Discontinue After Merger With Air India
There’s still about a year left before the merger process is completed.
