The proposed merger of Air India with Vistara is set to make Air India a truly international carrier. Air India and Vistara are currently serving around 40 and 15 international destinations respectively. The merger will result into a combination of Air India’s 90 year’s legacy with Vistara’s strong recognition and quality service. Adding to this is the Air India’s latest order to 470 aircraft including 40 Airbus A350s, 20 Boeing 787s and 10 Boeing 777-9s widebody aircraft, as well as 210 Airbus A320/321 Neos and 190 Boeing 737 MAX single-aisle aircraft.
The integration of Air India and Vistara needs to go through a regulatory approval process. There are three steps to that process, one is competition clearance, the second is the Directorate General of Civil Aviation’s (DGCA) perspective and the third is obviously the merger of the two companies, Campbell Wilson, CEO, Air India, said last month during a virtual media interaction.
“The integration with Vistara is now in the first stage of the process. But in anticipation of this we are working together with some external parties to work on what are the areas of opportunity in an integrated business, what are the things that we need to focus on in the process of that integration and what would the end state look like once we have received clearance to actually embark on the integration process.”
He also added that the intention is to end up with one full-service airplane and one low-cost airline in the group. The full-service airline will be an amalgamation of Air India and Vistara, but Air India expects that many of the practices and systems will be those of Vistara. “We are not unaware of what they have in terms of systems and processes and so over the course of the privatization process and the last year a lot of the transformation that we’ve been doing at Air India has been with the view to put ourselves on a similar platform as the Vistara so that in the event the merger is approved it’s a much more seamless and faster process,” he added.
When asked about how Vistara will be positioned post the merger, Campbell mentioned, “Vistara has a very strong recognition and respect 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. The future of full-service carrier will be called Air India but we would like to retain and celebrate some of the Vistara heritage in the new manifestation.”
On the new improvements front, Campbell states that Air India has taken up the task of the greatest transformation in the aviation history. He highlighted that they have curated the Vihaan.Ai program which is a 5-year transformation roadmap which is split into three phases to tackle the business challenges. There had been under-investment in terms of customer service, technology, engineering, network, and human resources, therefore in the first 6 months of Vihaan.Ai, Air India has considered addressing some of these critical points.
He further mentioned that Air India has hired 1200 new professionals in the year and partnered with platforms such as Microsoft Outlook and Office. Air India has also looked to improve with a new IT platform to ease the reservation processes and in-flight experiences. “The key area we have focused on is definitely the IT investing US$200 million for improving the platforms.” He also added that the historic order of the new aircraft will witness the first aircraft entering service in late 2023.
