New Delhi:

Under fire for faltering service standards, staff disputes and severely dated aircraft interiors, Campbell Wilson, the MD and CEO of Air India told NDTV that the revival of the airline will take a few more years to complete. “The Economist called this the Everest of corporate turnarounds,” said Mr Wilson. “We made no secret of the fact that it was going to be a multi-year programme.”

Now in year two of a five-year transformation programme, the management of Air India is facing an uphill battle to integrate thousands of workers across airlines that are now part of the group – Vistara, Air India Express and Air Asia India. Each airline, including the original Air India, has had its own work culture, however, bringing the job expectations of personnel into line has been particularly challenging.

Vistara pilots effectively went on a form of strike by calling in sick en masse, starting notably towards the end of March 2024, with significant disruptions continuing into early April 2024. This was a protest against new contracts introduced due to Vistara’s impending merger with Air India, which reduced their guaranteed flying hours from 70 to 40 hours, resulting in a pay cut for many pilots, particularly junior first officers.

In May this year, Air India Express cabin crew went on strike when a significant number of cabin crew members began reporting sick to protest against alleged mismanagement and issues related to their merger with AIX Connect (formerly AirAsia India). After initially dismissing several cabin crew members, the airline management reinstated them after mediation by India’s Chief Labour Commissioner.

“It is certainly not the finished product. I know that there’s a huge amount of expectation and indeed impatience for the future Air India to fully emerge,” says Mr Wilson. “I am equally impatient for that to happen,” he says, pointing out that despite the hiccups, there have still been massive changes in the direction of the airline.

”We’ve brought the average age [of staff members] from 54 to 35, hired 9,000 new staff, brought four airlines, 140 IT systems, 100 new aircraft, new training academies [and] started a base maintenance facility,” he said.

Asked about being fined for deficient safety practices, Mr Wilson acknowledged occasional systemic gaps, some of which could be explained through legacy practices within the former government carrier. “Sometimes it’s legacy practice. Sometimes it is a matter of human oversight. Sometimes it’s a matter of a systemic gap or something that hasn’t been addressed or mitigated through another means,” said Mr Wilson. “We open ourselves for audit every 6 months. We open ourselves for external audit, whether by IATA [International Air Travel Association] or other parties.”

Between January and August this year, Air India was fined at least Rs 2.8 crore by India’s aviation regulator, the Director General of Civil Aviation (DCGA) for a host of safety-related concerns linked to operations over long-range critical routes, violating the flight duty time limitations of its operating crews and for operating an international flight with ‘non-qualified’ crew members.

Air India’s decision to proceed with its planned merger with Vistara, widely considered India’s finest full-service airline, has also raised concerns among passengers and fans of Vistara who have consistently appreciated the former airline’s renowned service standards. Earlier this year, Vistara was adjudged the best airline in India and South Asia for the fourth consecutive year at the 2024 World Airline Awards by Skytrax. Vistara, now integrated with Air India, is also configured to a higher standard than a large majority of Air India’s existing A-320s and A-321.

”Vistara now allows Air India the opportunity to be catalyzed and the transformation accelerated at a new airline which represents the best of both Vistara and the legacy of Air India to be born,” says Mr Wilson. In order to be consistent with the quality offered by the Vistara product, Air India has announced that it will continue flying erstwhile Vistara Airbus A320neo aircraft on key metro routes between Delhi-Mumbai, Delhi-Bengaluru, Delhi-Hyderabad, Delhi-Hyderabad, Mumbai-Bengaluru and Mumbai-Hyderabad from December 1.

Air India’s biggest concern, arguably, is the long overdue fleet restoration of its existing long-haul jetliners including legacy Boeing 777s and 787 Dreamliners which it acquired from the government when the airline came into its fold. These are meant to complement its record 470 aircraft order from Airbus and Boeing, a $70 billion deal that it closed out on February 2023. This remains one of the largest single deals in the history of commercial aviation. The refurbishment of the existing fleet will cost the group $400 million. This includes the overhaul of cabin interiors for its wide-body fleet, comprising 27 Boeing B787-8 and 13 Boeing B777 aircraft. Single-aisle aircraft – the Airbus A320neo and A321neo are also being upgraded, a process that has already begun.

“It’s fair to say that, particularly, the legacy aircraft that we inherited, were not up to that standard, and it just takes a long time. We have committed $400 million to buy the seats to refurbish those aircraft. The seats have been in the certification and manufacturing process since then. They will start to be installed on the wide-body aircraft next year. The problem Air India faces with the pace of refurbishment of its older aircraft is an industry-wide issue,” Mr Wilson said.

“Two different seat suppliers, reflecting just the nature of the post-COVID supply chain, came to us and said, the dates we committed to deliver, we can no longer meet. There’s going to be a delay of, in one case, six months, in one case, a little bit longer,” he added.

This means that legacy Air India Boeing 787s and 777s which are scheduled for refurbishment will see a new and vastly improved interior product only from mid-2025 onwards. “Unfortunately, it is what it is. We don’t have any control over that. Many other airlines are affected by similar constraints,” Mr Wilson said.

The first set of new-generation Boeing 787 Dreamliner seats arrive in April and will be installed and then certified for use, though not before October next year. The pace of the upgrade will then pick up with a couple of Boeing 787 Dreamliner aircraft entering the refurbishment process every month. Air India’s large-capacity Boeing 777, which has operated long-haul routes primarily to the United States and the United Kingdom will take longer to upgrade. While there will be an interim refresh to the product on existing aircraft during 2025, the full cabin refresh will only happen in 2026.

“As I say at the end of 2026, the refurbishment is to be well underway,” said Mr Wilson.

In the meanwhile, Air India has introduced six brand new Airbus A-350-900 aircraft onto its flagship routes – New York and London with services commencing to Newark within weeks. While this is a welcome addition to the hard product offered by the legacy carrier, the truly new Air India is still years away from being realised. Mr Wilson realises this.

”We carry 60 million people a year across the group. We operate more than 1200 flights every day. And so, it is a mass transportation business, and unfortunately, you know, there are occasions where it’s not perfect,” says Mr.Wilson. “It’s just that we have to be more consistent and continue that process because I’m as impatient as anyone of improving this to the level that, you know, meets customer expectations all the time.”

An Air Vistara flight landing at Thiruvananthapuram Airport on November 11, 2023. Air India on November 12, 2024 said the merger of full service carrier Vistara with itself has been completed.
| Photo Credit: The HIndu

Marking a major consolidating in the Indian aviation space, Air India on Tuesday (November 12, 2024) said the merger of full service carrier Vistara with itself has been completed and the integrated entity will be operating over 5,600 weekly flights connecting more than 90 destinations.

With the merger, Singapore Airlines will have a 25.1% stake in the enlarged Air India.

“Air India Group has completed the operational integration and legal merger between Air India and Vistara, creating a full-service carrier of scale and marking a significant milestone in the post-privatisation transformation journey. This follows the merger of the Group’s low-cost airlines Air India Express and AIX Connect (formerly Air Asia India) on 1 October 2024,” a statement said.

Vistara was a joint venture between Tatas and Singapore Airlines.

Air India Managing Director and Chief Executive Officer Campbell Wilson said the merger completes the consolidation and restructuring phase of the Air India Group’s post-privatisation transformation journey, and is thus a significant milestone.

“Over the past two years, teams across the four airlines have worked closely together and with other stakeholders to ensure that the transition of people, assets, operations and, most importantly, customers, was as seamless as possible,” he said.

Tata Group acquired loss-making Air India from the government in January 2022.

A Vistara Airbus A320 passenger aircraft. File
| Photo Credit: Reuters

More than 80 pilots at Vistara have written to Tata Sons Chairman N. Chandrasekaran and the airline’s CEO Vinod Kannan alleging that they had been sidelined for promotions, ahead of Vistara’s merger with Air India next month.

In the letter to the top brass on Sunday evening, a copy of which was reviewed by The Hindu, Vistara captains expressed displeasure at Air India pilots being promoted to widebody aircraft as well as to the position of trainers ahead of them. They alleged that this violated the career progression list prepared by the Boston Consulting Group (BCG) for the pilots of the two airlines for the upcoming merger, which stated that for every Vistara pilot promoted to widebody planes, three from Air India would be upgraded based on the staff strength of the two airlines.

Ever since the BCG list was finalised, Air India had promoted 100 captains and moved them to twin-aisle Boeing 787, while only five had been upgraded in Vistara, they alleged.

Calling this violation a “transgression”, the pilots wrote that this meant there would be “fewer vacant slots for conversion from narrow-body to wide-body airplanes” once they were part of the enlarged Air India.

In his response via email on Tuesday evening, which was also reviewed by The Hindu, the CEO wrote that the implementation of the career progression list for Vistara pilots for promotions to widebodies and for the post of trainers would take place post the merger.

Vistara will merge into Air India on November 12, when both airlines will operate under the AI code and flight bookings will be shifted to the latter’s website.

Vistara pilots asserted in the mail that they were the “original Tata Sons employees”, while Air India was only acquired in 2022 and, therefore, various schemes were contrary to the “principle of natural justice”.

Another issue that has upset the pilots at Vistara is the mandate to avail the staff travel scheme, a key perk that allows the airline’s employees and their families access to free air travel with the airline. They said using the date of joining as the basis to determine an employee’s seniority to avail the scheme would place them at a disadvantage, irrespective of their seniority, simply because Vistara was launched in 2014, while Air India was a much older airline.

Concerns were also raised over anomalies in pay and allowances between individuals with similar levels of service seniority and experience. However, the CEO sought to reassure that increments over the next few years would be designed in a way to ensure that the disparities are removed overtime such that salaries of staff in the same cohort “converge.”

Image used for representative purpose only
| Photo Credit: The Hindu

A comprehensive enterprise assessment of all systems has been completed and the integration process is going on as part of the upcoming merger of Vistara with Air India, a senior official said on Monday (September 30, 2024).

Vistara, a joint venture between Tatas and Singapore Airlines, is set to be merged with Air India in November.

The process for the merger of the two full service carriers, announced in November 2022, is in progress.

Murali Karthik, VP & Head of Enterprise IT at Air India, stressed the importance of data-driven decision making process and a highly integrated system.

Speaking at a session at the CAPA India Digital Aviation Summit in the national capital, he also said a comprehensive enterprise assessment of all systems has been completed with respect to the merger of Vistara and Air India.

At the session, regional carrier FLY91’s CTO Prasanna Subramanian said it is building the complete architecture for the digital systems. The systems are being scaled up and the focus is also on data.

Vistara Airlines will be merging with Air India from November 12, 2024.
| Photo Credit: R.V. Moorthy

Vistara will merge with Air India from November 12, when its operations will be carried out by Air India and all bookings will be redirected to Air India’s website.

Starting September 3, passengers will no longer be able to book tickets with Vistara for travel on or after November 12.

These details were shared in an email from Vistara’s CEO Vinod Kannan to the airline’s employees.

The announcement followed soon after Singapore International Airlines sharing an update on the merger and informing in a press statement that the Indian government had given its nod for its FDI into Air India.

On June 6, the NCLT in an order granted its approval for the merger and allowed a period of nine months for the dissolution of the former. Vistara’s flying permit from the Director General Civil Aviation (DGCA) expires in December 2024.

Tata Sons Pvt. Ltd. will hold 73.38% stake in the merged entity, and Singapore Airlines another 25.1%.

“This approval, along with other governmental and regulatory approvals received to-date, marks a significant development towards the completion of the merger,” the SIA said in a statement.

Air India passenger aircrafts. File
| Photo Credit: Reuters

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Air India and Singapore Airlines will ensure minimum capacity on various domestic and international routes, including Delhi-Sydney and Delhi-Paris, as part of commitments made to fair trade regulator CCI to address possible competition concerns arising out of the Vistara merger.

Competition Commission of India (CCI), on September 1, approved the proposed merger of Vistara with Air India under a deal wherein Singapore Airlines will also acquire a 25.1% stake in Air India.

Certain competition concerns due to the proposed merger were raised by the watchdog and to address them, the airlines have given certain commitments with respect to the merger.

As per the commitments, Air India has voluntarily offered to maintain “minimum capacity/ supply level” on certain overlapping O&D (Origin & Destination) domestic and overseas routes.

They are Bhubaneshwar-Delhi, Bengaluru-Guwahati, Cochin-Delhi, Delhi-Thiruvananthapuram, Amritsar-Delhi, Bhubaneshwar-Mumbai and Bengaluru-Delhi in the domestic segment, according to a 73-page CCI order that has been made public.

The international routes where Air India will maintain minimum capacity/ supply level are Delhi-Sydney, Delhi-Melbourne, Delhi-Paris and Delhi-Frankfurt.

On these domestic and international routes, both Air India and Vistara operate flights.

Further, Air India and Singapore Airlines will maintain minimum capacity/ supply level in relation to certain overlapping O&D pairs between India and Singapore — Delhi-Singapore, Mumbai-Singapore, Tiruchirappalli-Singapore and Chennai-Singapore.

“The Commission notes that the voluntary capacity commitments offered by the parties seem to address the likely competition concerns that could otherwise result from the proposed combination and thus decided not to proceed further with the investigation in the matter,” the order, dated September 1, said.

The merger deal would mark a major consolidation in India’s fast-growing aviation space.

Once the merger concludes, Singapore Airlines will be allotted additional shares in the merged entity through a preferential allotment. The deal will make Air India the country’s largest international carrier and second-largest domestic carrier.

Air India Express and AIX Connect (earlier known as AirAsia India) are in the process of being merged.

Tata Group has four airlines — Air India, Air India Express, AIX Connect and Vistara, in which Singapore Airlines has a 49% stake.