Key Points
Last month, Air India announced the sunset on Vistara..
At the time, the SIA also said that there were challenges to scaling up Vistara amid stiff competition in the Indian aviation market, especially from larger incumbent Indian airline companies, which, over the years, had established a strong foothold in terms of securing air traffic rights and aircraft slots in many of the flight networks in and out of India...
The proposed merger, it added, would enable the SIA group to immediately gain exposure to an entity, which is four to five times larger in scale compared to Vistara and has access to valuable slots and air traffic rights at key domestic and international airports, via its investment, thereby helping it to strengthen its market presence...
He, however, noted that some of the challenges for Air India going forward could be delays in the hard product refurbishment, delayed Boeing deliveries, weak ground services at Indian airports, which contract agencies hand-lead, vast difference between Vistara catering and AI catering from same vendors, and customer grievance redressal, which, he said, needs to become more personalised and less bot-driven...
Martin said India, as a market, is not new to mergers and acquisitions in the airline industry, starting from the merger of NEPC Airlines with Damania Airways Ltd. in 1996, followed by the Jet Airways-Sahara one, the Kingfisher-Deccan Aviation merger, and the 2008 Air India-Indian Airlines merger...
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