Monday, June 24, 2024

All Vistara staff to be absorbed in Air India: CEO

Air India will absorb all 5,100 Vistara employees as part of the merger plan to consolidate the number of airlines under the Tata group to two from four, Vistara’s chief executive Vinod Kannan said.

After acquiring Air India, the Tata group plans to merge low-cost carriers AirAsia India with Air India Express and Vistara with Air India. Two airlines – one low-cost and one full-service – will operate under the Air India Group, in which Singapore Airlines will hold a 25.1% stake.

“There will be opportunities for everyone in the bigger unit. All of them will be absorbed in the new combined entity,” Kannan said in an interview on the sidelines of the CAPA India Aviation Summit.

Kannan explained that Vistara has about 5,103 employees, and around 80% are operational staff, including pilots, cabin crew and engineers.

“The operational staff will be transferred with the aircraft,” he said, adding that the support staff will find a place in Air India as the airline, in its earlier avatar, as a government-run carrier, did not hire for several departments in the past 15 years.

“Campbell Wilson (Air India chief executive officer and managing director) has just said that the airline did not recruit people in these departments in the past 15 years or so… The assurance (to Vistara staff) is that we will find a place for you. It may not be like-to-like in the same title and same designation etc., but it will be something that you will be comfortable with,” Kannan added.

Air India’s new management, under Wilson, believes that the performance of the staff it has inherited following the acquisition of the government entity could have been better. There is a feeling that Vistara’s staff, who are younger as well as trained to work not just in a corporate style of functioning but also in a company with both Tata group and SIA as promoters, could aid Air India’s revival.

Kannan, who started his career with Singapore Airlines in 2001, joined Vistara as chief strategy officer in 2019. In January 2022, he took the reins of the airline as CEO from Leslie Thng when the latter moved back to Singapore Airlines.

The Vistara brand name will not be retained by Air India after the merger, but Kannan said decisions are yet to be made about whether Vistara’s operating permits will be renewed or not.

With the discontinuation of the brand Vistara and reduced stake of Singapore Airlines in the merged entity, Kannan said he is not aware whether he will be part of the new Air India.

“It is something that will depend on the shareholders and also on Singapore Airlines because I am a staff from Singapore Airlines. It has not been decided yet,” he said.

Vistara, which started operations in January 2015, became a preferred airline for many fliers but could not make profits in a highly price-sensitive Indian market. That, however, changed during the third quarter of the current fiscal, when the airline said it broke even for the first time in a quarter since inception. The airline also crossed the $1 billion revenue mark and has remained operationally profitable in the current fiscal year so far.

On 29 November, Singapore Airlines and Tata Group announced a merger between Air India and Vistara, which is expected to be complete by March 2024.Kannan added that the merger may happen before the deadline, but much would depend on statutory approvals, including from the Competition Commission of India.

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