The National Company Law Tribunal (NCLT) has granted approval for the merger between Air India and Vistara, marking a significant milestone in the consolidation of India’s aviation sector. This merger is set to position the Air India group as the country’s largest international carrier, providing extensive connectivity across five of the seven continents and operating more international flights than any other Indian airline.
With the NCLT’s nod, Air India and Vistara can now commence the intricate process of integrating their networks, human resources, and fleet deployments. This approval follows the earlier green light from the Competition Commission of India (CCI) in September 2023, which was a crucial regulatory step. “Currently, Air India and Vistara operate flights to the same destinations around the same time and use different resources at the airport like separate check-in counters. The synergy will remove such duplicities and create a more efficient operation,” said a source familiar with the merger process.
To streamline the integration, a consortium of consultants, including Boston Consulting Group (BCG), Sabre, and Oliver Wyman, has been engaged to harmonise the workforce and route network. The merger process is planned to be gradual to avoid disrupting flight operations, ensuring continuity of service.
In a recent town hall meeting, Air India CEO Campbell Wilson informed employees that approximately 7,000 Vistara staff members have been assessed for their new roles within Air India, with transfers expected to commence in June. The integration of non-flying employees has already begun, with sixty Vistara employees moving to Air India and around 120 pilots being transferred between the two airlines. Despite the strategic benefits of the merger, there is some apprehension among Vistara employees regarding their future roles. “We have been told that the process of inducting existing employees of Vistara into the new structure is being done on the basis of merit and competency, and that it will be transparent,” said an employee, reflecting the cautious optimism within the workforce.
The merger aims to eliminate operational redundancies, such as duplicate check-in counters and overlapping flight schedules, thereby enhancing efficiency. It will also leverage the combined strengths of both airlines, offering a more robust and streamlined service to passengers. The strategic integration facilitated by this merger is expected to bolster the competitive positioning of the Air India group in the global aviation market. With the combined expertise and resources of Air India and Vistara, the merged entity is poised to offer improved connectivity and service quality, catering to the evolving needs of international travellers.
