Summary
- Air India and Vistara boards will remain separate for at least another year as the merger awaits regulatory approval by 2025.
- The operational merger of the two carriers is expected to take at least a year, stretching through 2024, as merging networks and operations is a time-consuming process.
- The Vistara brand may continue to exist for longer than expected due to its strong reputation and pedigree in the country, as Air India aims to bring its service quality up to Vistara’s standards.
Air India and Vistara will not be integrating their boards any time soon, with reports stating the management teams will remain separate for at least another year. The two airlines’ merger still awaits regulatory approval and is expected to be finalized in 2025.
Air India and Vistara boards to remain separate
The two airlines are reportedly in no rush to integrate their boards as the deal progresses. Those close to the matter believe the merger will still take another half-year to receive official clearances – Air India expects approvals from the National Company Law Tribunal (NCLT), the Ministry of Civil Aviation, and the Department for Promotion of Industry and Internal Trade (DPIIT) to come through by at least the middle of 2024, and will also face scrutiny from international regulators.
Photo: Abdul N Quraishi – Abs | Shutterstock
After this, the process of merging operations will begin – last month, Vistara CEO Vinod Kannan said the operational merger of the two carriers will take at least a year, possibly “stretching through the middle of next year.” Echoing this, a top executive is quoted by the Economic Times as saying,
“The operational merger could stretch through 2024 as merging networks and operations of airlines take time.”
As Simple Flying reported last year, the two airlines have already started with employee integration, aided by consultancy firm Deloitte. This included management and leadership assessments, along with a pilot town hall meeting.
No rush to drop Vistara brand
Under the terms of the merger, Vistara will cease to exist as a brand. However, it’s unclear how long the Vistara brand will remain marketed or when its aircraft will be re-liveried in Air India colors. It may be the case that the brand stays alive for longer than expected.
Photo: Vistara
Brand expert Santosh Desai does not believe scrapping the brand is a good idea, as the Vistara name holds a pedigree unmatched in the country. Desai told the Economic Times,
“Vistara is the best-regarded airline in the country today, and to sacrifice such a brand for Air India, which is certainly not ready yet, would not be a good plan. Air India has a legacy issue and to completely revamp it inside out – with new aircraft and staff customer service mindset -will take several years. And it is not because of any lack of effort by the Tata group. It is the sheer enormity of the job.”
Raising standards
Air India executives have admitted that the airline is behind Vistara in terms of service quality, on-time performance and other metrics, and want to bring Air India up to these standards. Besides inducting new, next-generation aircraft in the coming years, Air India will refurbish its fleet interiors to bring the airline up to modern standards.
How Much Of Vistara Will We See In The New Air India?
Vistara will lose its individual identity next year, but does that mean that no trace of it will be left?
Under the merger, 49% Vistara stakeholder Singapore Airlines will also retain a 25.1% stake in the new airline.
Are you looking forward to Air India and Vistara’s merger? Let us know in the comments.
