By Staff Correspondent
In a recent move demonstrating their anticipation of a regulatory green light for their merger, Vistara, a Tata Group and Singapore Airlines joint venture and Air India, have initiated deliberations over staff integration. Vistara’s Chief Executive Officer, Vinod Kannan, asserted on Monday that, while a comprehensive staff rationalisation at Vistara is unlikely, some staff may not retain their current positions or functions within Air India.
Air India is concurrently harmonising its various staff divisions under a unified structure. Kannan indicated that the preliminary phases of integration will occur between the longstanding and new employees of Air India before incorporating the workforces of Vistara and AirAsia (India). This strategic move arises from Tata Group’s acquisition of the erstwhile state-run airline in the preceding year following a government auction.
The planned integration stems from the Tata Group’s acquisition of the former public airline last year, a transaction facilitated via a government auction. Vistara represents Tata’s joint business with Singapore Airlines, while another venture, AirAsia (India), partnered with the Malaysian budget carrier of the same name, now operates as a subsidiary. The eventual fusion of these entities, alongside Air India and its globally-operating offshoot, Air India Express, is set to result in the emergence of two distinct airline organisations – one dedicated to full-service offerings and the other to low-cost operations.
The Vistara CEO is optimistic about securing the necessary regulatory approvals for the merger of Vistara and Air India by April 2024, with the tangible process of merging likely to conclude within a few months of approval. Regulatory permissions are expected from the Competition Commission of India (CCI) and the National Company Law Tribunal (NCLT). The CCI has already initiated an inquiry into the proposed merger, with Kannan assuring a timely response and affirming that all regulatory proceedings are proceeding as scheduled.
Kannan underscored that certain integration aspects, including network and brand considerations, can only be addressed following regulatory approval. Over the past nine months, he elaborated on Vistara’s positive operational and financial performance. The airline reached an operational break-even in the third quarter of the previous fiscal year. Furthermore, Kannan highlighted the increasingly significant contribution of international routes, particularly long-haul ones, to the airline’s profitability, attributing this to a greater customer expenditure on business class and premium economy seats.
