The management of both airlines are moving full steam ahead to prepare for the eventual merger.

First A320neo of Vistara
Photo: Airbus

Merging the businesses of two national-level airlines such as Vistara and Air India sure requires a lot of work. Indeed, the two airlines have given themselves more than a year to complete the process, and a new report suggests that work is progressing swiftly, as there’s plenty to be done.

Work underway

Air India and Vistara have not wasted any time preparing for their merger ever since the official announcement for the same was made in November last year. And a new report by Mint gives more details about the behind-the-scenes action taking place to bring together their businesses.

Air India Airbus A320

Photo: Nicolas Economou | Shutterstock

The report highlights that consultations are taking place across departments focusing on optimizing operations, employee salaries, and merging two different airline cultures into one. This also involves interviewing employees at various levels, with a source saying,

“The top management of both airlines and senior to mid-level executives will be interviewed by external consultants, followed by another round of talks with an expert internal team, with representatives from both airlines. Then the best fit will be retained for the post, and other candidates will be given a different role if available.”

Compensation and efficiency in focus

Among the many things being discussed is the issue of employee salaries. People aware of the matter have told Mint that Air India wants “parity in the compensation structures since the non-flying crew of Vistara is paid more than those of Air India.” One could expect salary revisions for many such Air India employees in the coming days.

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Vistara Boeing 787

Then there is also the question of roping in new talent and optimizing the existing workforce. Many employees close to the retirement age could be given another option of voluntary retirement before Air India hires new employees to fill their roles. The report quotes the source as saying,

“Even those who are not close to retirement will be judged on the basis of merit. There will be no free lunches.”

The airline will likely retain its pilots and cabin crew as it looks to expand its fleet in the near future. Indeed, as reported earlier, Air India is actively seeking experienced pilots for the Boeing 777 fleet as it looks to expand operations to North America.

Air India Airbus A319

Photo: BoeingMan777 | Shutterstock

Regulatory approvals

Meanwhile, both airlines have also already started the regulatory process required for the merger. As reported in December, approvals have been sought from key agencies such as the DGCA, the Ministry of Civil Aviation, and the Reserve Bank of India.

The Competition Commission of India will also need to certify that the merger will not affect consumer rights in the country. Other smaller bodies, such as the Airport Authorities of India, will also need to give the go-ahead, and the entire process is expected to take up to six months.

What are your views on this? Please leave a comment below.

Source: Mint


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