AI-Vistara merger gets NCLT nod

The National Company Law Tribunal (NCLT) on Thursday approved the merger of Air India and Vistara, paving the way for creation of India's largest international carrier by the end of this calendar year.

According to a copy of the order reviewed by ET, NCLT Chandigarh bench has asked the companies to execute the merger within nine months.

The merged entity will connect five of seven continents, operating more flights on international routes than any other Indian carrier.

The NCLT nod will also allow both airlines to start integrating their networks, human resources and fleet deployments.

The Competition Commission of India had already approved the merger last September.

"Currently, Air India and Vistara operate flights to the same destinations around the same time and use different resources at the airport like separate check-in counters. The synergy will remove such duplicities and create a more efficient operation," a person familiar with the matter said.

Consultants like BCG, Sabre and Oliver Wyman are working on harmonisation of the workforce and route network of the two carriers.

People involved in the process said the integration will happen gradually as both airlines don't intend to ground their existing flights as part of the process.

Air India CEO Campbell Wilson said in a town hall last month that about 7,000 employees of Vistara have been assessed for their new positions in Air India and the transfer is likely to begin from June, people said.

Vistara and Air India have also started the process of integrating non-flying employees. A total of 60 employees of Vistara have already been moved to Air India. Also, around 120 pilots of Air India and Vistara have been shuffled between the two airlines. However, employees of Vistara remain edgy about the merger, saying they haven't got any clarity yet on their future roles.

"We have been told that the process of inducting existing employees of Vistara into the new structure is being done on the basis of merit and competency, and that it will be transparent," said an employee at Vistara requesting anonymity.