challenges of merger
Analysts say Wilson’s staggering turnaround plans will be severely tested as Air India executes the twin mergers.
Airline mergers in India have had little success, with Air India still reeling from the ill-fated integration of Indian Airlines in 2007. The takeover of Sahara by Jet Airways and the merger of Kingfisher with Air Deccan hurt them over the years.
Jet and Kingfisher are now bankrupt.
Air India’s aircraft are already a mix of Airbus AIR.PA and Boeing BA.N jets with multiple cabin configurations. It will become more complex when it will absorb new carriers.
“Managing a mixed fleet is a nightmare and no airline would want to do that,” Vinod Kannan, chief executive of Tata-Singapore Airlines joint venture Vistara, told Reuters.
Once an inspiration for Singapore Airlines, Air India now lags far behind, particularly service and punctuality – areas it must improve rapidly if it wants to reclaim share from the Gulf carriers, which serve most of India. Carry international traffic.
There are some early signs of success: Air India’s international traffic grew 28 per cent in the October-December quarter compared to April-June, and its domestic share at the end of February has grown from 7.5 per cent in mid-2022 to 9 per cent. According to government statistics.
Those figures should jump significantly when Air India ties up with Vistara, but the deal brings new challenges.
Kannan said during an interview at Vistara’s office near Delhi, “You can fix everything, but the people and the culture… It’s not easy to get it right.”
In Air India it is more than 50.
“The intent is very high,” Kannan said of the combination, which is slated to be completed by March 2024.
