Even as Air India and Vistara’s proposed merger is being scrutinised by the Competition Commission of India (CCI), Campbell Wilson, CEO and MD of Air India, has told employees that the integration of the low-cost carriers (Air Asia India and Air India Express) “continue to make progress”. On the other hand, planning for a single much-larger full-service carrier under the Air India Group, continues, he added.

In an internal communication, Wilson said, the CCI’s request for additional information is a normal part of the evaluation process and that the company welcomes it.

Wilson emphasised that progress is being made in integrating the low-cost carrier airlines and “in planning for an eventual end state” where the Air India group has a single “much large full-service carriers” and “a single (also much larger) low-cost airline” with aligned practices.

Tata Sons, the parent company of Air India and Vistara, informed the CCI that the merger will not have any adverse impact on competition. There are already competitors on most of the routes where the combined entity would operate. Although the CCI’s decision to review the merger could potentially delay the process, it is not expected to have a significant business impact.

CCI notice

Earlier, the CCI had issued a notice to Air India and Vistara, seeking reasons why a probe into the merger’s impact should not be initiated. According to competition law, the antitrust body has the authority to conduct a thorough investigation to address concerns about potential anti-competitive practices resulting from the deal.

If the merger is approved, Air India would become the largest international carrier and the second-largest domestic airline in the country. The Air India group, which the Tata Group acquired last year, aims to modernise its fleet, operational systems, and revenue management.

In terms of market share, the combined Air India group would hold 49 per cent of total flights on the Delhi-Mumbai route and 52 per cent on the Delhi-Bengaluru route. However, it must be noted that IndiGo, India’s largest airline, also maintains a strong presence on these routes, with 31 per cent and 35 per cent share respectively.

The Air India group assured the CCI that the cost difference between a full-service and low-fare carrier is minimal as they operate from common airports and face similar expenses such as fuel, landing charges, and parking fees.

Town halls

Wilson highlighted that the company is rolling out a new organisational structure and conducting town halls to explain the framework, address questions, and also gather feedback.

The transition from a public sector to a private sector model, as well as the integration of employees from different backgrounds and preparation for potential Vistara integration, is a complex process.

The future holds tremendous opportunities and growth for Air India, with career paths that reflect this positive outlook. Wilson concluded by encouraging employees to keep their sights set on the future, stating, “the future is Al”.

Related Topics
comment COMMENT NOW