Vistara-Air India merger: How these two distinct brands will blend

Experts say the merged entity will draw on USPs of both firms.

In about a fortnight, Vistara – known for its premium service – will take off on its final flight before merging into the legacy of Air India.

Set for November 12, the merger has sparked discussions on how these two distinct brands will blend.

Air India’s website highlights the merger with the tagline “Unveiling the possibilities,” while Vistara’s rea­ds, “#ToLimitlessPossibilities”.

Des­pite a unified vision, branding experts point out the challenges of merging their unique selling points, customer approaches, and contrasting cultures.

“It’s a complex scenario. The two brands currently occupy opposite ends of the spectrum,” says Santosh E G, a Bengaluru-based brand and marketing consultant.

Air India’s identity is steeped in heritage, with its iconic Maharaja mascot and Jharokha-style windows offering a cost-effective option for long-haul travel.

“It’s perceived as more economical,” notes Santosh.

In contrast, Vistara has attracted a niche audience that’s willing to pay extra for a more refined, global standard of service.

“From its colour palette to crew uniforms, Vistara is more aligned with Singapore Airlines than with anything typically Indian,” he adds.

Vistara, a joint venture between Tata Sons and Singapore Airlines, will see Singapore Airlines retaining a 25.1 per cent stake in the merged entity.

Currently, it has 49 per cent, with Tata Sons holding the majority stake of 51 per cent.

Experts see the presence of Singapore Airlines post the merger as a strategic move that will bolster Air India’s tech capabilities and global reach.

When 1+1 isn’t 2

Experts agree that this is a merger of unequals.

“The lesser prestigious of the two is leading the brand,” says Santosh Desai, CEO of Futurebrands, a brand consultancy.

“Air India must integrate Vistara’s strengths while adding its own upgrades.”

Jitender Bhargava, former executive director of Air India and author of “The Descent of Air India”, believes the Maharaja’s larger network and global recognition give it an edge.

“Today, you may question its productivity and efficiency, but there is a glorious past to the airline. People have a connection with it,” he says.

With new aircraft like the A350 and a series of transformations, Bhargava says Air India is already nearing Vistara’s standards.

Vistara’s focus on premium experiences has not gone unnoticed by Air India.

“Existing members of Club Vistara — the airline’s frequent-flyer programme — will be seamlessly transferred to Air India’s Flying Returns programme,” Air India said recently.

While Air India is the larger brand, Vistara commands stronger loyalty among its smaller audience, brand experts say.

“An Air India flyer may prioritise affordability, but Vistara’s clientele is loyal to its premium experience,” says Santosh.

“The most promising outcome could be a shared brand platform of ‘global, but with an Indian soul’,” he suggests.

Performance data from March to September shows Vistara leading in on-time performance, peaking at 82.15 per cent in May.

Until the lines blur

While Vistara will cease to exist after November 11, full integration will be gradual. Air India CEO Campbell Wilson has assured passengers that “the Vistara in-flight experience is not going away,” but experts view the coming months as crucial for the success of the merger.

“The immediate challenge will be digital integration, customer support, and loyalty programmes,” says Karan Singh, co-founder of QSS Global, a New Delhi-based consulting firm.

He adds that while Vistara flights will continue with the same fleet and crew, using Air India planes for certain flights may be necessary depending on scheduling complexities.

Bhargava highlights the merger’s impact on Air India’s workforce dynamics.

With several voluntary retirement schemes in place, Air India’s old-to-young employee ratio has already shifted to 3:7.

With Vistara bringing in younger staff, that ratio could reach 1.5:8.5.

“The merged entity will benefit from both experience and fresh talent,” he says.

However, employees may face challenges.

“Differences in leadership styles and organisational norms could lead to friction and reduced efficiency,” Singh cautions.