The Tata Group, India's salt-to-steel conglomerate, received a crucial nod from the Directorate General of Civil Aviation (DGCA) on Monday, paving the way for the simplification of its airline business. This approval greenlights the mergers of Vistara and AirAsia India into existing carriers, Air India and Air India Express, respectively.
This move marks a significant step towards the Tata Group's goal of streamlining its aviation operations under two main brands. Air India, the national carrier acquired by Tata in 2022, will become the full-service airline, while Air India Express will function as its budget arm, absorbing the operations of the former AirAsia India.
The DGCA's approval was essential due to regulations mandating pilot crossover training when switching airlines or aircraft types. With this hurdle cleared, the Tata Group can now proceed with crew integration and operational harmonization across the merged entities.
"This is an important milestone in the merger of the Tata Group airlines, " said Campbell Wilson, Chief Executive Officer and Managing Director of Air India. He expressed gratitude for the "timely clearances" provided by the Ministry of Civil Aviation throughout the process. Wilson further lauded the DGCA's "safety-first change management approach, " which aligns with the Tata Group's own safety priorities.
The merger process has involved meticulous efforts to standardize operational procedures across all four airlines. This includes harmonizing the extensive network of supporting manuals that govern various aspects of flight operations. Streamlining these procedures is expected to enhance operational efficiency and potentially reduce costs.
While the DGCA's approval represents a major achievement, one final step remains before the mergers are fully realized. Foreign investment approval is still required from the government for Singapore Airlines' stake in the new Air India. Singapore Airlines currently holds a 49% stake in Vistara, a joint venture with Tata. Upon the merger's completion, this stake will convert into a 25. 1% ownership in the consolidated Air India.
The Tata Group has set an ambitious target of finalizing the entire integration process by the end of 2024. With the DGCA's nod in hand, the group is well on its way to achieving this objective. The successful consolidation of its airline holdings is expected to bolster the Tata Group's position within the Indian aviation industry, creating a more streamlined and potentially more competitive air travel network.