New Delhi: The merger of full-service carriers Air India and Vistara is a complex process and customer-facing elements, including the brand, won’t change before 2025, Air India’s chief executive and managing director Campbell Wilson said.
“Behind-the-scenes planning is underway. The regulatory and legal [approvals] are in process. The customer-facing elements will take some time [to change] and we are not rushing it,” Wilson said at the Skift India summit on Wednesday.
Air India, a state-run airline for 69 years, was reacquired by the Tata Group under a government-led strategic disinvestment programme in January 2022. Later that year the Tata group announced a merger of Air India and Vistara.
Vistara, currently a 51:49 joint venture of Tata Sons and Singapore Airlines, commenced operations in 2015. After the merger, Singapore Airlines will hold a 25.1% stake in the combined entity.
The Competition and Consumer Commission of Singapore (CCCS) recently gave conditional approval to the merger, six months after the Competition Commission of India approved it in September 2023. This will allow the two airlines to efficiently plan their routes and codeshare network.
“We have been very clear that Vistara in the long term will become Air India. The Air India brand is 92 years old. It is recognised around the world. Vistara has a very, very strong reputation and awareness in India, but not so much globally,” Wilson said.
“A lot of the things that we are doing are modelled on what Vistara does, but we will eventually be collapsing the two. As I say, we won’t be rushing it. It will probably be [completed] some time next year,” he added.
Air India, which carries about 12% of international air traffic to and from India, also sees an opportunity in the medium-haul and long-haul international market. The airline said the order for 470 aircraft that it placed in February 2023 will help it address this capacity shortage in India’s large market. The Air India group has been procuring aircraft from the new order at a rate of one every six days, with three A350s and more than 15 Boeing 737 MAX inducted so far.
“India can be home to at least three hubs. In addition to those, there are plenty of point-to-point services. [The market] is probably a similar sort of size to [those of] Europe or North America. North India has a good east-west flow, and south India has a good Asia-Africa and even Australasia-Europe flow,” Wilson said.
Air India’s desire for multiple hubs in India is shared by the broader industry and the civil aviation ministry. The government is working on a National Aviation Hub policy which will encourage more non-stop flights from international destinations to Indian metro cities and seek to establish hubs similar to those in Singapore, Dubai and Doha.
“The international opportunity is staring everyone in the face. In [some hubs], upwards of 70-90% of people are not going to that place – they are going through that place. I think if we get the basics right and are credible, we will get the time-sensitive, discerning, premium traveller who values the experience that we are going to provide,” he added.
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