Vistara merges into Air India; how will the ailing legacy carrier plan its rebirth?

Chetan Bhagat’s Two States, a 2009 novel on how he met and married his girlfriend from a cultural background sharply opposite to his, was a bestseller.

Such romances were and still are, in many parts of India, hard to pull off and sometimes meet tragic ends. People love reading such stories because of their triumph-against-all-odds plot. Seeing the book sales, it was not surprising to see it be transformed into a movie of the same name in 2014.

The Tatas, a salt-to-software conglomerate, would be hoping for less daunting adventures than the ones in Bhagat’s story, when it announced the merging of its nine-year-old Vistara airlines into the nonagenarian Air India, two strikingly opposite entities, as it aims to rule the global skies once again as the former national carrier did in the middle of the nineteenth century.  

Founded in 1932 by J.R.D. Tata, Air India initially acted as a mail carrier before it started hurtling people from one place to another and in 1953, the government nationalised the airline.

Air India was then a symbol of excellence from its staff to its service to its timeliness; one of the earliest symbols of atmanirbharta, which incumbent Prime Minister Modi has espoused since he took office in 2014.

Unfortunately, the decades under government administration transformed Air India into a picture of pity and lost glory with issues like steeply rising debt, terrible service, and poor timeliness making the news every other day.

Vistara, on the other hand, is a joint venture between Tata Sons (51% stake) and SIA or Singapore Airlines (49% stake) and has grown to become a young and sophisticated brand. Its purple and gold shades, comfortable seating, in-flight experience, and staff have received praise and the airline is considered a bright spot in India’s aviation sector.

In July 2022, as per a Moneycontrol.com report, Vistara became the second largest airline in India with a 10.4 per cent domestic market share.

Tata Sons on November 29, 2022 announced Vistara shall be merged with Air India and as part of the merger transaction, SIA shall also invest Rs 2,059 crore in Air India. Post the consolidation, SIA shall hold 25.1% shareholding in Air India which with a combined fleet of 218 aircraft will become India’s largest international carrier and second largest domestic carrier.

An unlikely match?

Seeing two drastically opposite airlines merge is one thing but to see Vistara’s name and everything which comes to it fall into oblivion might negatively affect the new brand. A lot of fliers would not have known Air India as much as they’d have enjoyed flying with Vistara.

The merger will obviously impact this, says Lloyd Mathias, business strategist and angel investor. “While in the short term it will mean a change of Vistara’s logos and livery, it will be a culture change within that will make the real difference.”

Speaking on similar lines, Amar Wadhwa expects the Vistara service and the brand to get represented in the new Air India brand. He is the founder and executive director, CrystalEyes, a consultancy.

The teacher becomes the student

Today’s Air India is the same airline for which surrealist Salvador Dali had made ashtrays, its air hostesses stood miles above most people, and The Maharaja, its mascot, despite being fictional, was a powerful ruler with a near incomparable service. Over the years, governments changed and so did their policies, but the maharaja has failed to win back his throne.

The merger with Vistara might do the airlines a whole lot of good. For starters, “Vistara is not a flashy airline like Kingfisher and that someway reflects the Tata experience,” says Wadhwa.

He says the Tatas are emotionally invested in Air India and will ensure they bring the airline back to its glory days. “The merged entity will have scale and once you have scale - you can do a lot of things which you can't do as an individual brand… According to me, the one big differentiator that the merger will deliver is services.”

Service is critical to an airline’s success because the poorer the flier’s experience, the less likely they will choose to fly with that airline again. Air India is no different. “Besides improving their service standard Air India,” says Mathias "also has to work on key differentiators to compete with low-cost carriers and foreign airlines."

He also feels the new Air India has to ratchet up its customer orientation and become more agile and efficient. “It no longer has the baggage of a large bureaucracy, or the obligations to kowtow to government functionaries.”

Phoenix on the rise

A phoenix dies and rises again from its ashes. Air India was nearly comatose and is now taking little steps towards its goal. “It is time for Air India to reflect what contemporary India is all about,” says Krunal Rawat, creative director, Landor & Fitch, and feels there will be a “complete overhaul in the airline’s logo and in-flight experience and design and delivery…”

Going forward, as per Sambit Mohanty, Air India would do well to imbibe these Vistara’s superior flying experience, and ensure it tops the charts in customer satisfaction – “something that’s a sore point for the brand today.” He is creative head, south, McCann Worldgroup.

Air India, however, is not 100% down in the dumps. It has its good bits as well and what matters, says Santosh Padhi, is the mindset of the people who will lead the airline from now on because their mindset will percolate to the bottom. He is the chief creative officer, Wieden+Kennedy, India.

What’s in a brief?

A new Air India will definitely mean a fresh communication campaign. But, what should it speak about, should it even mention Vistara, should the Maharaja make a comeback or should he stay retired? So many questions.

From a communication standpoint, “there ought to be a proper relaunch of the Air India brand in its all-new avatar,” feels Mohanty, while Padhi feels the company will have to take a call on whether to bring the maharaja back. “Maharaja has not been exposed to Indians who’re travelling these days, 50% not exposed to that character. I think we should keep it open.”

Much ado about nothing

The announcement of the merger created waves, discussions raged, and so did news reports. Was it all necessary? Prabhakar Mundkur does not think so.

“I don’t think anything will happen to Air India. People overthink. Marketing and advertising.  We don’t even miss Jet Airways and yet it was our favourite a few years ago,” states the former adman and independent brand strategy advisor.

He feels Air India is on its way to being a better product and a better brand.

“British Overseas Airways Corporation (BOAC) did not become British Airways overnight. Why are expecting an overnight change in Air India. Air India was the pride of India once upon a time. It’s taken many decades to destroy its image. But the move upwards will happen soon.  Air India has a rich heritage of great advertising. I can only hope that they get back to the standards they set in airline advertising since the 50s,” remarks Mundkur.

One can only wait and see if the new Air India does meet a fate similar to Two States or not.