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Air India, Vistara merger to be completed by year-end: Report

The officials from both airlines are said to have communicated to the staff that more than 60 Vistara employees have already been seconded to Air India. Reportedly, a merit-based system is being followed for employee fitment for the new entity which will reportedly have five Vistara employees for every 12 Air India staffers.
Last Updated : 14 May 2024, 08:44 IST
Last Updated : 14 May 2024, 08:44 IST

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Over four months after Vistara CEO Vinod Kannan hinted that its merger with Air India would see completion by mid 2025, Air India recently said that the merger would complete by the end of this year after all necessary procedures are communicated to the staff under the people integration process. Vistara's staff of more than 7,000 will be integrated into Tata owned Air India from June, in multiple phases.

Top executives of both Air India and Vistara convened a meeting recently where they apprised their respective staff about the developments of the merger. A report in the Indian Express quoted sources aware of the merger proceedings as saying that Tata group is also mulling the merger of its budget carriers Air India Express and AIX Connect (previously AirAsia India).

After the respective mergers are completed— Air India Group has decided to have a full-service carrier Air India, and another low-cost airline which is Air India Express.

The officials from both airlines are said to have communicated to the staff that more than 60 Vistara employees have already been seconded to Air India. IE reported that the assessment is also complete for over 7,000 employees of which around 3,500 are flying personnel, and 2,500 are non-flying staff. In total, Air India and Vistara are estimated to have close to 24,000 employees.

While the merger was announced by Tata in 2022, it was approved by the Competition Commission of India in 2023. The parties involved in the entire merger process are Tata Sons Pvt Ltd (TSPL), Air India Ltd, Singapore Airlines, and Tata SIA Airlines Ltd (TSAL). Singapore Airlines owns 49 per cent stake in Vistara, and will hold a 25.1 per cent share in the merged Air India — once it is formed.

As per the sources, a merit-based system is being followed for employee fitment for the new entity which will reportedly have five Vistara employees for every 12 Air India staffers. Both the airlines have also decided to increase the managerial roles by one-and-a-half-times— which would encourage requisite career progression opportunities— that the Vistara staff was complaining about last year.

Meanwhile, the National Company Law Tribunal has already concluded hearing for approval of the merger between Air India and Vistara, and an order regarding the same is awaited.

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Published 14 May 2024, 08:44 IST

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