After Air India Express / AirAsia India (now known as AIX Connect) was merged, Air India and Vistara’s merger is in focus now. The airlines have managed to secure the permissions from all international regulators. They are currently awaiting the go-ahead from the NCLT (India’s Company Court), to be able to proceed with a merger. The intended timeline for the merger is within 2024.

However, in the meantime, Air India CEO Campbell Wilson and Vistara CEO Vinod Kannan, who has also been designated the Chief Integration Officer for the merger, addressed a company-wide townhall, where employees of both airlines were addressed. This town hall was held yesterday, May 13.

Air India and Vistara intend to close the merger by December 2024

Both the bosses informed the teams that to date 120 pilots are mobile and seconded across both airlines, while the NCLT approval is awaited on the merger. 7,000 employees of Vistara will be impacted, out of which 2,500 are flying crew, 3,500 are non-flying crew and the remaining are office staff (such as sales and marketing, HR, etc.). Assessment has been completed, while “talent fitment” is at an advanced stage at the moment.

In the combined entity, Air India intends to keep the 12:5 ratio, which, per AI was the ratio of staff between Air India and Vistara on the day the privatisation of Air India had been completed. Air India has around 17,000 people and Vistara has about 6,500 employees. 60 Vistara employees are already seconded to Air India at the moment.  Air India and Vistara have already enabled staff travel and IDtravel on both airlines for the other one’s employees.

Air India and Vistara management, which are part of the integration committee, have undergone an “employee fitment process”, and the duplicate jobs will be eliminated. To avert job losses, to which the number is not known, some employees will be placed in other Tata group companies and trained for their new jobs. A minimum viable team will continue to operate at Vistara till the day the Air Operators Certificate of Vistara is not returned to the Government of India. In June, the roles of Vistara employees will be informed to them in the combined entity.

Air India had hired consultants to map out the new structure under which the merged entity would operate. The consultants advised that Vistara employees be moved to AI and Air India Express, depending on where they are needed.

Alongside this, a clearance on the foreign investment from Singapore Airlines is awaited from India’s Department for Promotion of Industry and Internal Trade. When SQ injects new capital into the expanded Air India, the airline will receive a 25.1% stake in the Air India Group (in exchange for its equity in Vistara and the additional capital). Last year, the Competition Commission of India approved the merger.

Bottomline

Vistara and Air India’s merger is awaiting its approval from the NCLT, in the meantime the airlines are going to go ahead and tell the Vistara employees about their roles at the merged entity. About 7,000 Vistara employees have to be absorbed, and some might be brought into the full-service entity, some in the no-frills entity, and some will be sent to other Tata group entities. The declaration will come around by June 2024.

What do you make of the current progress of the merger between Air India and Vistara?

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