Tata Sons approach CCI for key approval in merger of Air India and Vistara

Necessary approvals for the merger of Air India (AI) and Vistara (UK) are currently under process. The concerned stakeholders (TATA owned Air India and Vistara, a JV between Singapore Airlines and TATA) have appeared before the Competition Commission of India (CCI) for regulatory approval allowing merger of the two Full Service Carriers (FSC) into a single entity, Air India (AI).

However, before this key approval is awarded, the concerned authorities will investigate any threats to the market and evaluate further aspects from this merger to its rivals.

Tata Sons, Singapore Airlines, Air India and Vistara have all requested approval from India's antitrust watchdog, the CCI, for the commercial merger of Air India and Vistara. Currently, the Tata family owns 100 per cent stake in Air India, 49% in Singapore Airlines. The Tata Group (51%) are partners in Vistara. SIA will invest $250 million and hold 25.1% of the merged entity.

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“The proposed transaction relates to consideration of the merger of Tata Singapore Airlines Limited (Vistara) into Air India and the acquisition of shares in the merged entity by Singapore Airlines and Tata Sons," a notice filed with the CCI read. 

It is crucial that the CCI considers whether there will be enough competition for the combined entity on a few crucial flight routes. The CCI will impose corrective measures to address any discrepancies it has with the merger if it is not convinced with the components. The approval of the CCI is one of the many conditions necessary for the merger.

The integration will be completed sometime early next year, according to the existing schedule. A full-segment airline (a joint venture between Air India and Vistara) and a low-cost carrier (a joint venture between AirAsia India and Air India Express) will eventually be under the ownership of the Tatas.

Processes under the mergers, such as employee integration, are already under way. All 5000+ Vistara employees would be able to find employment with Air India. For non-flying employees who are being considered for leadership positions, interviews are being held at various levels.

The senior to mid-level executive who best fits the position will be kept on, and other candidates may be offered a new position if one becomes available. Issues surroudning pilot seniority and professional advancement have also been covered.

The Vistara brand would no longer exist as a result of the merger, which would be a significant outcome. The Tatas believe that Air India is considerably more well-known internationally, thus the combined company will still have that identity. Nevertheless, aspects of Vistara's working traditions and culture will be retained in the merged carrier.