Merged Air India-Vistara to kickstart by early 2025

AI-Vistara merger: The merger between Air India and Vistara has reached a crucial juncture as the Tata Group has set the ball rolling for the integration between October and December this year. The Tata Group is expected to kickstart the merged airline only in 2025 with the merged brand as Air India. 
Air India CEO Campbell Wilson has indicated that customer-facing aspects, including Vistara’s brand identity, will remain unchanged until 2025. The integration is aimed to leverage synergies, enhance efficiencies, and minimise redundancies as Tata Group is keen on consolidating its airline business. Republic Business brings to you a larger picture of the merger, including the human resources and the operational aspects.  

Merger contours  

As per the post-merger shareholding pattern of the company, Tata Sons Private Limited will hold 73.38 per cent stake in the airline company, followed by Singapore Airlines Limited with 25.1 per cent and SBICAP Trustee Company Limited (on behalf of Air India Employee Settlement Trust) will hold 1.52 per cent shareholding. 

The merged Air India-Vistara entity will have about 218 aircraft and is expected to become India's largest international carrier and second-largest domestic carrier, as per a statement from the Tata Group.  

The top brass of Air India including CEO Campbell Wilson Chief Commercial Officer Nipun Aggarwal and Chief Financial Officer Sanjay Sharma are expected to retain their roles.  The CEO of Vistara Vinod Kanan may go back to his parent company Singapore, as per media reports. 

While a team comprising senior executives from Air India, Vistara, and the Boston Consulting Group is collaborating on human resources integration, it is widely believed that Vistara’s ground staff will be retained after the merger, aviation expert Dhairyasheel Vandekar told Republic Business.  

“Airport ground staff of Vistara are likely to be accommodated in the same locations and in case vacancies are not available,  they may be suitably relocated,” added Vandekar. 

During the human integration process, Vistara’s non-flying staff has undergone the Hogan Test, designed by the US-based Hogan firm. This test assesses normal personality traits essential for job suitability, particularly in leadership roles. Some roles at Vistara are likely to become redundant as Air India already has them. 

Campbell Wilson, Chief Executive Officer & Managing Director, Air India has described the integration as an important milestone in the merger of the Tata Group airlines. 

“DGCA has guided our teams with a safety-first change management approach which is congruent with the safety-first priorities of the Tata Group. The live tracker created by the Flight Standards Directorate of DGCA with a dedicated team for continuous monitoring of the progress of the harmonisation process has been instrumental in achieving the challenging task in a time-bound manner,” said Wilson.

Op procedure harmonisation  

The two airlines had last week concluded the harmonisation of the operating procedures across its key functions, including harmonisation of the supporting manuals across all four carriers, reaching an important milestone in the merger of four airlines into two.

As per a company spokesperson, over the last 18 months, a team of more than 100 members has worked to align on the best practices and adopt common operating procedures. The result of this will be two separate manuals for the full-service carrier and the low-cost carrier. Air India and group companies are initiating the necessary crew training to action the harmonised processes, which will be another step in the direction towards building the new Air India and Air India Express, the spokesperson said last week.

Tata Sons owned premium full-service carrier Vistara retained its spot in the top-20, as it was ranked 16th Best Airline globally for the second year in a row. Vistara also ranked 8th in the ‘Best Airlines in Asia 2024’ Skytrax Awards. Post-merger Vistara standards will provide a fillip in improving the service quality of AI, especially in light of poor onboard experiences reported.

NCLT Order  

The National Company Law Tribunal (NCLT) Chandigarh in June gave its approval for the merger of Air India and Vistara. The merger, which was initially announced in November 2022, has received the green light from various stakeholders and regulatory bodies. As per the NCLT order, the transfer or companies (Vistara) shall stand dissolved without undergoing the process of winding up on completion of the merger and associated formalities after receipt of necessary approvals including FDI approval/security clearances as required under relevant CARs (Civil Aviation Regulations) issued by DGCA/MCA/any other authority within a period of nine months from the date of its order.