The merger between the two full-service airlines of the Tata Group has already received clearance from India’s antitrust body and Kannan told ET that other approvals, including from foreign regulators and for foreign investment, are likely to come in the first half of next year. While this process is happening in the background, the airline jointly owned by Tata Sons and Singapore Airlines will continue to add more aircraft and routes, and invest in new products and services, he said.
“I keep communicating to our employees that this is a merger for growth, we are not looking at scaling back or cutting back. There will be no job losses and the same organisations (Tata Sons and Singapore Airlines) will be shareholders in the new integrated entity,” said Kannan, a former Singapore Airlines executive who joined Vistara in 2019 and became its CEO in 2021. “My priority is to ensure that my staff has a soft landing in the integrated entity. And it is for the shareholders figure out my role in the future,” he said.
The Tatas in November 2022 announced the merger of Vistara with Air India, to create a bigger full-service airline. Singapore Airlines will hold a 25.1% stake in the merged entity and the remaining 74.9% stake will be held by the Tata Group. Separately, the low-cost carriers of the group, Air India Express and AirAsia India, too will be merged.
Dedicated committees are working on preparing the four entities for the integration, according to people in the know. The group has also hired an integration specialist for this.
Meanwhile, Kannan said: “We continue to grow and remain independent.”Vistara has launched new flights to Hong Kong and Frankfurt and will this month add flights between Delhi and Bali. Its fleet has grown from 58 aircraft a few months ago to 63 now and it will go up to 70 planes including seven wide-bodied airliners by the end of this financial year in March, the CEO said.”For any kind of company or business, the biggest morale booster is actually growth. There are a lot of positive messages and here again, I have to give full credit to my management team, as well as each of our 6,000-plus staff, for delivering this kind of growth,” he said. Air India too is separately going ahead with its expansion, “because they also have a very, very ambitious target in front of them”, Kannan said.
Air India had ordered 470 aircraft and is set to receive a new aircraft every six days over the next 18 months.
While every effort is made to ensure the transition to a combined entity is smooth, “it is never a comfortable situation where two companies come together, even if they are the best companies in the world, or even if they are most aligned culturally”, Kannan said. “But the fact is that we are trying to make it as open and transparent as possible. And we hope that the end culture is something that will resonate with every part of the four companies that are coming together.” Kannan said the merger process needs three sets of approvals.
While the deal has received the approval of the Competition Commission of India in September, it still has to be cleared by antitrust regulators in other markets where it has operations, including in Singapore since one of Vistara’s owners, Singapore Airlines, is based there. This process is under way, Kannan said.
While another set of approvals is related to the Indian company law and are given by the National Company Law Tribunal, the deal also needs the clearance of aviation regulator Directorate General of Civil Aviation and the Ministry of Civil Aviation, he said.
