By TripFactory Holidays
The merger aims to enhance operational efficiency and profitability, making Air India a stronger competitor in both domestic and international markets.
The merger is expected to save over ₹500 crore annually through renegotiated contracts, including areas like fuel, catering, and operational services.
The combined airline is aiming for cumulative cost savings of ₹1,800 crore by the fiscal year 2027.
Air India’s Vihaan.AI program is guiding this transition, divided into three phases: Taxi, Take-off, and Climb, with the Climb phase focusing on integrating operations with Vistara.
Transformation Program – Vihaan.AI
The merger will allow for reduced redundancies, better bulk procurement rates, and more streamlined operations, leading to cost efficiency.
The larger entity will be better equipped to handle industry challenges, including fuel price fluctuations and market competition.
Air India plans to retain the high-quality Vistara experience for passengers and will retrofit its narrowbody fleet by mid-2025 to improve service.
Post-merger, Singapore Airlines, a stakeholder in Vistara, will hold a 25.1% share in the new airline and is expected to realize a non-cash gain of SGD 1.1 billion (around $832.45 million).
The new entity aims to achieve profitability by FY27, focusing on strategic investments in fleet, customer service, and technology.
This merger marks a significant shift in the aviation landscape, with Air India poised to emerge as a more competitive and efficient player in the global market.