Air India & Vistara Merger To Be Completed Soon

Daniel Fowkes
24 Apr 2024
· Airlines 
An Air India Boeing 787 departs from London Heathrow

Air India’s planned tie-up with Vistara as part of consolidation from Tata Group across India is ramping up with an expected close date unveiled.

The Hindu Business Online reports that the tie-up could be completed as part of ongoing consolidation efforts as soon as October. The pair is targeting this timeframe to make the tie-up official. However, they still face some roadblocks.

Notably, one area of focus is clarifying training requirements for airline pilots and crew. However, as the two airlines have different operating manuals, the ambition is to combine them under one.

As a result, when the airlines are officially merged, there will be a far smoother integration and greater harmony across the company. However, there could be some impact if approval weren’t granted following discussions with the Directorate General of Civil Aviation.

Most notably, the impact would be felt across flight schedules for the airlines coming together. This would be because the need to train pilots and crew would take resources and valuable time.

If Tata Group can prevent this, they’ll do everything in their power. While making safety the priority, they’ll ensure no communications are cut, and the smoothest integration is possible.

Other Factors To Consider

Ultimately, while attempting to understand the best means to merge the companies in the short term, there’s much to consider. Notably, a focus has to be placed on the felt at both airlines and the cabin configuration of each aircraft.

Away from the fleet, Vistara and Air India also share, in some cases, a similar route network with the prospect of overlapping schedules. Analysts expect a major shift in aircraft deployment when the airlines come together.

However, across the last week, Tata Group identified turbulence with its pilot rosters at Vistara that have led to cancellations, among other complexities. This latest roadblock needs resolving before the two airlines can come together and has been labelled turbulent.

Consolidation In The Industry

Consolidation within the aviation industry has been a common theme in recent times. Airlines from all corners of the globe have looked to come together in different means to enhance their connectivity.

The further development of codeshare and other interline agreements has allowed airlines to enhance their global connectivity. Meanwhile, on the more extreme, airlines have come together wholly as full takeovers and mergers.

Regulators of markets around the world closely examine mergers. It’s crucial to analyse whether the specific consolidation efforts will have negative rather than positive ramifications.

Regulators will study factors such as the effect on consumers and whether airfares will rise if the merger is approved. They will also focus on the effects of competition. Essentially, does the merger and formation of a mega airline ruin prospective or existing airlines’ attempts at taking market share?

If these factors are deemed the case, the regulators will push to either cancel the takeover plans or amend the conditions.

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