Air India-Vistara Merger Picks Up Steam - India Report

15.05.2024 - 03:55 / skift.com / Bulbul Dhawan

The merging of Air India and Vistara seems ahead of schedule, according to reports in Indian media that cite Air India CEO Campbell Wilson’s comments at a town hall meeting with the employees.

The timeline now looks like end of this year – it was previously expected to be complete by mid-2025. 

Just six weeks ago, pilots of Vistara protested against the new pay structure. Together, the airlines have over 23,000 employees. 

Why is the merger important? The merger of Air India and Vistara combines India’s only two full-service carriers, creating the only domestic full-service airline. Air India and Vistara are the second- and third-largest market shareholders in India, respectively, after IndiGo. In the first quarter of 2024, the two airlines collectively held a 22.5% market share, DGCA data showed.

The move was decided upon after the Tata group acquired Air India from the government of India in 2022. As a part of the process, Singapore Airlines agreed to purchase a 25.1% stake in Air India. Singapore Airlines is Tata’s partner in Tata SIA Airlines Limited, a joint venture that operates as Vistara. 

The merger progress so far: According to a PTI report, Wilson and Vistara CEO Vinod Kannan held the meeting for over an hour on Monday. They shared that over 7,000 employees have been assessed and their roles and responsibilities would be clear by the end of June. 

Both the airlines have also finalized the organization structure of the merged entity, taking into account the plans for fleet expansion, network growth, and enhanced service.  

The merger will allow passengers to access more options and choices across the worldwide network of the combined airline, Campbell said. He added that the combined Air India group will have a vision of an accelerated growth path and stable financial situation, an issue that plagued the airline when it was operated by the government. 

While both India and Singapore competition regulators have given their approvals to the merger, it is awaiting a nod from the National Company Law Tribunal (NCLT) in India. The hearing by the tribunal in the matter has been concluded and a final decision is now pending. 

Budget airline Akasa Air has announced its plans to expand international operations with Jeddah as the second international destination. The airline will operate daily direct flights between Mumbai and Jeddah starting July 15, it said in a statement. 

This frequency will be increased to 12 weekly flights between the two cities from July 21. The airline will also operate two direct flights a week between Jeddah and Ahmedabad from July 20. 

Akasa Air launched operations to Doha as its first international destination in March and it has also received the traffic rights for Kuwait