Merger of Vistara with Air India: Read the full text of Vistara CEO Vinod Kannan's email to employees

Vistara CEO Vinod Kannan (Illustration: Moneycontrol)

The employees of Vistara airline received assurances and further clarity about their future on November 29, soon after Singapore Airlines (SIA) and Tata Sons announced that they have agreed to merge Air India and Vistara.

In an email to employees, Vinod Kannan, Chief Executive Officer (CEO) of Vistara airline, said the multiple airlines controlled by the Tata group will be combined to form Air India and Air India Express, which would be a 100 percent-owned subsidiary of Air India.

The CEO also stated Vistara would maintain its independence during the "lengthy" merger process with Air India, adding "In the short term, nothing changes and it is business as usual."

Kannan also expressed hope that the combined entity would considerably benefit from each Vistara employee's experience, knowledge, and initiative.

Vistara will consequently combine with Air India. However, this merger process, although starts today, will need a regulatory approvals and will therefore be completed in March 2024, Kannan said.

Kannan said Vistara is committed to growth and fleet expansion objectives, from the current 54 to 70 aircraft by the end of 2023. He further added that the company will help Air India achieve new frequencies, routes, and destinations.

Here is the full email of Vinod Kannan to the airline employees:

Over the last few weeks , you would have read articles in the media around strategic discussion between our shareholders.

I would like to now inform you that both our shareholders have reached an agreement on the future structure of their airline business in India. The various airlines under the Tata group ownership will be merged and result in two entities - Air India and its 100% owned subsidiary, Air India Express. Singapore Airlines will continue to remain invested and will own 25.1% of the resultant Air India. Vistara therefore, will also merge into this entity. Though this process has commenced today, it will require various regulatory approvals and hence will fructify around Mar 2024.

So what does this mean for us as an organization?

There are a few implications that I would like to highlight :

We remain committed to the growth, fleet and expansion plans that we had charted out - plans that see us going from the current 54 aircraft fleet to 70 by end 2023. This will continue and we will progressively introduce new routes, new destinations and new frequencies as we had originally set out to do - as Vistara.

As I have mentioned earlier too, though we have a common shareholder, we remain an independent entity vis a vis Air India till the entire process is completed and we have approval from the relevant competition authorities. Therefore, we should not engage in sharing or discussing commercially sensitive information. If in doubt , please consult your line manager or the legal team .

The process of amalgamation is lengthy as I have mentioned above. Till then, we will need to ensure that we maintain and exceed the high standards that we have set for ourselves. This is not an easy task in itself and layering on the additional complexity of the integration, it will be challenging. However, I am sure I can count on each of you and your professionalism to achieve this.

Our partners and service providers may also approach you on what this means for them. In the short term, nothing changes and it is business as usual. As we start receiving various approvals, we will provide updates to them and involve them as necessary in relevant discussions.

The other questions that I am sure are in your minds are - “What happens to me? What role will I play in the combined entity?”

We have all worked hard and tirelessly to build and establish Vistara as the award winning airline of choice in India in a short span of time. This has borne significant results that we are all aware of - on the operational , financial and people front. This has not gone unnoticed - by management , the Board and our shareholders. The fact also is that the combined entity will also greatly benefit from the experience, expertise and enterprise of each of the Vistara staff members. In fact, it is what the shareholders are counting on.

As our Chairman has repeatedly mentioned in townhalls and various interactions, the potential and scope for an airline of the scale of the combined entity, is enormous. There will definitely be multiple opportunities - for growth, elevation and progress. Therefore, I urge you not to worry and speculate about your future. We remain an integral part of the aviation footprint of our shareholders and this does not change - regardless of the AOC we ascribe to.

There will undoubtedly be other questions that may come to your mind. We can discuss those at the upcoming townhall. However, I can assure you that we are on this journey together and will emerge stronger at the end of it.

I look forward to meeting all of you soon at the townhall next week.