India’s two (and only) full-service airlines, Air India and Vistara, will join forces next year and merge to become a single entity. Both brands are significant in their own way, but one will have to give up its identity once the merger process is complete. And that airline is going to be Vistara.

Air India brand will take over

Air India’s chief executive officer Campbell Wilson has clarified that the airline will continue to be known as Air India following its merger with Vistara. The reason for this is Air India’s long presence in the international market.

Despite the various hiccups over the past several years, Air India is still a well-known brand globally. Vistara is relatively young and has a bigger presence in India. As such, the carrier will have to give up its identity following the merger. Wilson commented,

“Vistara clearly has a very strong recognition in the Indian market...but if you look outside the Indian market, clearly Air India is much more recognized and has a 90-year history. So, the future full-service carrier will be called Air India, but we would like to retain and celebrate some of the Vistara heritage in that new manifestation.”

Vistara is a joint venture between the Tata Group and Singapore Airlines. SIA partnered with the Tata Group years before the Air India deal took shape to tap the promising domestic market in India and owns 49% of Vistara. Last year, the Tata Group announced that SIA will claim a 25.1% share in the merged entity.

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Integration process

Meanwhile, work is already underway to combine the businesses of the two airlines, which in itself is a huge task. Senior executives from both airlines have begun the process of employee integration with the help of consultancy firm Deloitte.

Interviews are being conducted at various levels for non-flying staff who are being assessed for leadership roles. The best fit among senior to mid-level executives will be retained for the post, and other candidates will be given a different role if available.

Approvals of key agencies such as the DGCA, the Ministry of Civil Aviation, and the Reserve Bank of India are also being sought, and the competition commissions of both India and Singapore will also have to give the go-ahead, as Vistara is a joint venture of the Tata Group and Singapore Airlines.

Looking ahead

Air India recently announced the biggest commercial aircraft order in the history of aviation for 470 airplanes from Boeing and Airbus. Wilson explained that the company will use three methods to finance the order: cash flow, equity by parent Tata Group, and sale and leaseback.

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Air India will receive six Airbus A350s this year. These planes were originally meant for Aeroflot, but that commitment could not be fulfilled due to the sanctions on Russia. The airline also has several more planes arriving on short-term leases and has already started hiring pilots and cabin crew to keep up future fleet expansion.

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  Air India

  IATA/ICAO Code:

  AI/AIC

  Airline Type:

  Full Service Carrier

  Hub(s):

  Delhi Indira Gandhi International Airport

  Year Founded:

  1946

  Alliance:

  Star Alliance

  CEO:

  Campbell Wilson

  Country:

  India

  Region:

  Asia