Air India management says merger with Vistara will be completed by 2024-end, NCLT hearing done

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The merger of Air India and Vistara will likely be completed by the end of 2024 or early 2025, Air India's executive officer Campbell Wilson and Vistara's chief executive officer Vinod Kannan told employees of both airlines in a townhall meeting on May 13.

As part of the presentation made by Wilson and Kannan, the airlines told their employees that so far 120 pilots have been integrated by Vistara and Air India, and the airlines have completed the National Company Law Tribunal hearing on the proposed merger and are awaiting the official orders.

The airlines also said that the promoters of Vistara, Singapore Airlines have filed for approval to become a minority investor as part of Air India, approval for which are expected shortly.

The presentation also said that 60 non-flying staff from Vistara have also been seconded to Air India and the assessment and integration of around 7,500 staff is nearing completion.

Out of the aforementioned 7,500 employees, 2,500 will be flying staff, 3,500 will be non-flying staff and the rest will be from sales, marketing, engineering and accounts.

The airlines also announced that the merged entity Air India will soon launch South Asia's largest aviation academy and will also set up an aircraft maintenance, repair, and operations facility for aircraft in Bengaluru. SIA Engineering is the exclusive partner to help Air India with designing and conceptualising the outfit, the airlines told employees today.

The Tata-Group airlines also announced that half of the 470 aircraft ordered by the group last year will be supplied to Air India, while the other half will be supplied to its subsidy Air India Express.

Air India has around 17,000 people and Vistara has about 6,500 employees.

In March this year, Singapore’s competition regulator Competition and Consumer Commission of Singapore (CCCS) gave a conditional nod for the proposed merger. In September 2023, the deal received approval from the Competition Commission of India (CCI), subject to certain conditions.

Vistara is a joint venture between the Tata Group and Singapore Airlines will remain as a brand till 2025, and will be slowly merged as a part of Air India.

Vistara began its operations in 2015. It is a 51:49 joint venture of Tata Sons and Singapore Airlines. But after the merger takes place, Singapore Airlines will get a 25.1 percent stake in the combined company.

The townhall by Vistara and Air India comes just in the backdrop of employee unrest at Air India, Vistara and Air India Express over the last year.

Between May 8 and May 10, Air India Express was forced to cancel close to 300 flights, affecting thousands of domestic passengers in the country, after a large number of the airlines senior cabin crew took co-ordinated sick leaves, resulting in network-wide disruptions for the airline.

Similarly, in April, Vistara was rocked by disruptions when many of its pilots called in sick en masse.

The cabin crew of the airline reported ‘sick’ to protests against HR-related concerns amid the merger of AIX Connect with the airline. Last month, the Air India Express union had written a letter to Tata group chief N Chandrasekharan, expressing growing dissatisfaction among the employees. The letter also highlighted the unequal treatment of employees.

Trouble at the airline began soon after Tata group took over the Air India airline and its subsidiaries. The management of Vistara, Air India and now Air India Express have faced protests from both the crew and the pilots over the new terms of employment offered to them.

The Tata group, after taking over from the government in 2022, promised to hike the salaries of 2,700 pilots and over 5,600 cabin crew. The new contracts offered to the pilots saw the reduction of the guaranteed flying allowance component to 40 hours per month from 70 hours. This became a bone of contention as pilots said it will cut their salaries significantly.

The Vistara pilots also found support from two Air India pilots union, who wrote a letter to Tata Group Chairman N Chandrasekaran on April 4, urging the leadership to engage in constructive dialogue with pilots and take proactive measures to address their grievances.

The issues reiterated by the two trade unions are cutting down of the 70-hours guaranteed flying allowance to 40 hours, approval of leaves, adequate rest periods, unstable roster, stretching pilots to maximum flight duty, botched roster practices and an unsupportive work environment, including issuing threats to pilots on “potential disruptions to their future”.

The Tata group is consolidating its aviation business by merging four airlines into two: Air India and Vistara are merging to form a single full-service carrier, while AIX Connect and Air India Express are combining to create a unified low-cost carrier (as a subsidiary of Air India).