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The Indian aviation landscape witnessed a significant shift on November 12, 2024, as Vistara, a joint venture between Tata Sons and Singapore Airlines, officially merged with Air India. This merger, announced in November 2022, marks a pivotal moment in the country's airline industry, bringing together two prominent players to create a powerful force in both domestic and international markets.
The integration process, however, wasn't without its hurdles. Pilot shortages led to widespread flight cancellations, and Vistara crew members protested over proposed salary alignment with Air India's structure. Despite these challenges, the merger ultimately reached fruition, resulting in Singapore Airlines holding a 25.1% stake in Air India. Additionally, Singapore Airlines committed an investment of Rs 3,194.5 crore in the Tata Group-owned airline.
Air India has taken proactive measures to ensure a smooth transition for former Vistara passengers. Help desks, kiosks, and dedicated customer support staff have been deployed at airports and other touchpoints. Vistara's airport ticketing offices and check-in terminals will gradually transition to Air India branding. Vistara aircraft will be identifiable by a unique Air India code starting with the digit '2'.
The integration has also extended to loyalty programs and customer service. Over 270,000 Vistara customers have been migrated to Air India's booking system, and more than 4.5 million members of Vistara's loyalty program are being transitioned to Air India's equivalent. Furthermore, calls to the Vistara contact center are being automatically rerouted to Air India representatives to ensure a seamless customer experience.
The combined entity boasts a fleet of over 200 planes, offering connectivity to 90 domestic and international destinations. Air India's narrowbody fleet continues to be upgraded with new aircraft deliveries and refurbishments of legacy aircraft. Notably, Vistara's catering services are now extended to Air India.
The merger has also seen a managerial reshuffle. Vinod Kanan, Vistara's CEO, will continue in the role of Chief Integration Officer, reporting to Air India CEO Campbell Wilson. Deepak Rajawat, Vistara's Chief Commercial Officer, will become the Chief Financial Officer of Air India Express, reporting to its CEO Aloke Singh.
Despite the merger's overall success, some concerns have emerged. A section of Air India pilots is unhappy about the discrepancy in retirement ages between the two airlines. Air India pilots retire at 58 years, while Vistara pilots retire at 60. While salary and working conditions have been unified, this disparity in retirement ages remains an unresolved issue.
The merger signifies a significant consolidation in the Indian full-service airline sector. With Vistara's exit, only one full-service carrier, Air India, now operates in the country. Notably, IndiGo, a low-cost carrier, has announced its foray into the premium segment with the introduction of business class services, recognizing the growing demand for enhanced travel experiences.
The merger of Vistara and Air India represents a turning point for the Indian aviation industry. The combined entity has the potential to become a major player on the global stage, offering enhanced connectivity and customer service. However, challenges remain, including the need to address pilot concerns and the emergence of competition from low-cost carriers offering premium services.