Air India and Vistara begin their integration process

Tata Sons owned Vistara and Air India have started their integration process as the two airlines look to complete the merger process expeditiously.

A team of senior executives from Air India and Vistara, along with consultancy firm Deloitte, has started the integration of human resources while law firm AZB Partners is working on legal and regulatory compliance, according to a report in The Economic Times.

Air India and Vistara announced a merger last year. As part of the merger with Air India, which the Tata Group acquired in January, SIA will invest INR 2,059 crore in Air India. Once the transaction is complete, SIA will hold 25.1% of Air India.

ALSO READ - Tata Sons to invest USD 1.5-1.8 billion in Air India – Vistara merger

The merger between the two entities is likely to be a smooth affair because Air India has inducted many former Vistara employees. More importantly, CEO and MD Campbell Wilson has worked with SIA and its low-cost carrier Scoot. The deadline for the merger is March 2024.

Air India and Vistara begin their integration process

The Economic Times reports that the non-flying staff of Vistara is being assessed for leadership roles through a process called the Hogan Test. The report quotes a person familiar with the matter as saying, “Team managers and members reporting to the management directly have already been assessed and in the next few weeks, the next level of employees will be assessed for their prospective role. Since the two airlines had executives in the same role, it needs to be carefully assessed on who will be given leadership or managerial role.”

Sources had already revealed in January that following interviews with external consultants and internal teams, the best fit among senior to mid-level executives will be retained for the post, and other candidates will be given a different role if available.

Bringing the pilots of the two airlines together to run the fleet of the merged airline while also taking the seniority of the cockpit crew into consideration is another challenging problem to solve. According to reports, some Vistara pilots are concerned about how the merger may affect their seniority as they join a new airline.

There will be a town hall with pilots from both airlines present, where topics including seniority and career advancement will be covered.

The merger will need the approval of key agencies such as the DGCA, the Ministry of Civil Aviation, and the Reserve Bank of India. The competition commissions of both India and Singapore will also have to give the go-ahead, as Vistara is a joint venture of the Tata Group and Singapore Airlines.

ALSO READ - From A350s to B777Xs, Air India finalizes the Historic 470 Aircraft deal with Airbus & Boeing

Air India recently placed a mega order for 470 aircraft with Boeing and Airbus as it plans to become a dominant player globally.

(With Inputs from The Economic Times)

Air France-KLM Chief Executive Ben Smith on Friday reiterated that the airline was interested in Portugal's soon to be privatised TAP, noting the carrier's strong position in Brazil.

"We find (TAP's) network into Brazil extremely powerful for us," he told a media conference. The Portuguese government, which owns TAP, has said it is considering an outright or partial sale of the business.

TAP posted a rare net profit in the third quarter of 2022.

The airline group is eyeing up TAP's strong Brazilian network.

An Air France-KLM and TAP deal would just be the latest in what is becoming something of an airline consolidation spree in southern Europe. The group is already part of the preferred bidding consortium selected by the Italian government to takeover ITA; private equity firm Certares leads the bid.

Passenger traffic in Portugal and Spain recovered to 96 percent and 80 percent, respectively, of 2019 levels in the first half of 2022, Eurostat data show. Comparatively, Germany and France only recovered to 61 percent and 73 percent, respectively, of pre-pandemic numbers.

The big airline groups want a larger piece of this pie, especially as they see their discount rivals circling.

This is not the first time Air France-KLM has expressed interest in the Portuguese carrier following a similar declaration in October, with CEO Smith adding that "if the right circumstances are in place, we're interested. Consolidation is key for us, especially in Europe."

The country's largest airline IndiGo, which is "back with a bang", is looking to start flights to Nairobi, Jakarta and some central Asian destinations as the carrier focuses on internationalisation, according to its chief Pieter Elbers.

Amid intensifying competition and Air India set for expansion with massive plane orders, the IndiGo chief asserted that there is a lot of growth ahead in the Indian market that "justifies multiple airlines".

"A lot is going on in the Indian aviation landscape... The fact that Indian aviation is getting into the next stage, including the consolidation being done under the Air India group, is a natural evolution of the market. I look to the competition. It is good to have competition but it will be a competition that is going hand-in-hand with the growth of the market," Elbers told PTI in an interview here.

ALSO READ - IndiGo plans to launch flights to Nairobi, Jakarta and China

IndiGo, which has more than 300 planes in its fleet, currently operates to 76 domestic and 26 international destinations. Flights to two more domestic destinations -- Nashik and Dharamshala -- have also been announced.

IndiGo is "back with a bang" with several international flights

According to him, the Indian aviation market, which is very vibrant and dynamic, is recovering very strongly. "IndiGo is back with a bang," Elbers said, adding that the economic growth of India is helping IndiGo move forward and the network of IndiGo is further helping boost economic growth locally.

The airline operates around 1,800 flights daily and in terms of current seat offerings, it is roughly 80% domestic and 20% international.

"We will likely introduce new flights to Nairobi (Kenya) and Jakarta (Indonesia) this coming summer. We are looking at central Asia at a few destinations but that has not yet been decided... Internationalisation is a big part of our agenda," Elbers said.

Further, he noted that Nairobi and Jakarta are two important points to connect with tourism, business and the Indian diaspora. "So, all that combined, we have a great proposition".

"With further growth of India and the position of India combined with our capability even more so when XLRs are coming in, we are very ambitious of creating more international connectivity. A significant part of (international travel by Indians) today is taken by international carriers. For us as Indian carriers we can have a higher share," the IndiGo chief said.

ALSO READ - IndiGo reports a multi-fold surge in net profit to INR 1,422 crore in Q3

For the three months ended December 2022, IndiGo reported a sharp rise in profit at INR 1,422.6 crore and its highest-ever quarterly total income at INR 15,410.2 crore as travel demand remained strong. The budget airline carried 2.23 crore passengers in the December quarter and its domestic market share in 2022 stood at 56.1%.

On starting operations with the wide-body Boeing 777 aircraft, the IndiGo chief pointed out that it was the first step born out of the need for capacity.

"The market is growing and we were confronted with the supply chain situation, we really needed capacity. The flight has been there for two weeks and we see a very positive response from the market. Codeshares placed beyond Istanbul are working very well," he said.

On wet lease from Turkish Airlines, IndiGo started operating the B777 aircraft on the Delhi-Istanbul route on February 1. The plane has a seating capacity for 400 passengers with economy and business classes.

Without giving specific details about the Aircraft on Ground (AOG) situation, the IndiGo chief said it is "basically a stable situation". The supply chain woes have been impacting airline industry worldwide resulting in delays in the deliveries of aircraft.

"We have stabilised the supply chain situation and we are talking with suppliers to have good support in dealing with it. We have extended the leases, we have the wet lease... we will have a capacity for the total fiscal year 2023 which is very much in line with the initial plan," he said.

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Elbers also sought to emphasise that IndiGo operates almost 1,800 flights every day and wide-body flight is one of them. On the airline's plans for wide-body planes going forward, Elbers said it has always kept the option of wide-body aircraft open but did not divulge specific details.

"IndiGo has never ruled out any option. We do have a significant order book. We have almost 500 aircraft on order... we have a steady stream of deliveries coming. Our focus and emphasis will be on that part. We do have the XLRs order that will further stretch the range of operations for IndiGo," he said.

The airline has placed an order with Airbus for A321XLR aircraft, which will have a longer range, and these planes are expected in 2024-25, depending on the aircraft maker's delivery schedule.

When asked whether there could be a possibility of IndiGo converting some of the planes on order into wide-body, Elbers said the focus of the aircraft order is to serve its today's network.

While noting that the airline has continued to optimise its products, he said it consistently reviews what is going on in the market and stressed the three customer promises.

"All these elements come in at additional trade-offs to be made and for us to continue on the path of affordable fares is a very very important part," Elbers said.

Air India will require more than 6,500 pilots to operate 470 aircraft that are to be supplied by Airbus and Boeing in the coming years, according to industry sources. Currently, Air India has around 1,600 pilots to operate its 113 aircraft fleet and in recent times, there have been instances of ultra-long-haul flights getting cancelled or delayed due to a shortage of crew.

Seeking to expand its fleet as well as operations, the airline has placed orders for acquiring a total of 840 aircraft that includes an option to buy 370 planes. This is one of the largest aircraft orders by any airline. According to Air India, the first of the new aircraft will enter service in late 2023 and the bulk of the planes are to arrive from mid-2025 onwards.

The airline's two subsidiaries -- Air India Express and AirAsia India -- together have around 850 pilots for flying their 54 planes while the joint venture Vistara has more than 600 pilots. The latter has a fleet of 53 aircraft. Air India, Air India Express, Vistara and AirAsia India together have a little over 3,000 pilots to operate the combined fleet of 220 aircraft.

ALSO READ - From A350s to B777Xs, Air India finalizes the Historic 470 Aircraft deal with Airbus & Boeing

The latest Airbus firm order comprises 210 A320/321 Neo/XLR and 40 A350-900/1000. The Boeing firm order comprises 190 737-Max, 20 787s and 10 777s.

Air India will require 6500+ pilots for the recently ordered 470 aircraft

"Air India is taking these 40 A350 majorly for its ultra-long-haul routes or flights which last over 16 hours. The airline will require 30 pilots -- 15 commanders and 15 first officers -- per aircraft, which means some 1,200 pilots for A350s alone," the source in the know said.

ALSO REA - Multiple Aircraft Types, Benefits Air India

According to the source, 26 pilots are required for one Boeing 777. If the airline inducts 10 such planes, it will require 260 pilots while 20 Boeing 787 will require some 400 pilots considering that each such aircraft needs 20 pilots -- 10 commanders and 10 first officers.

Taken together, the induction of 30 wide-body Boeing planes will require a total of 660 pilots, the sources said. On average, each narrow-body plane, whether it is the Airbus A320 family or Boeing 737 Max, requires 12 pilots, implying that 400 such planes in the fleet will require not less than 4,800 pilots for their operations.

On Thursday, February 15 Air India Chief Commercial Officer Nipun Agarwal in a Linkedin post said "the order comprises 470 firm aircraft, 370 options and purchase rights to be procured from Airbus and Boeing over the next decade".

According to Air India's former Commercial Director Pankaj Shrivastava, enough opportunities have to be created for the Commercial Pilots Licence (CPL) holders to get them to type ratings. Type ratings are a particular training that makes a pilot qualify to operate a particular type of aircraft.

"Air India would definitely have some plan in place. They would not be buying these planes to put them on the ground," he said.

These aircraft are not going to be inducted tomorrow but over a period of time. During that period, Shrivastava said that he was confident that Boeing and Airbus along with Air India will be able to create a large enough pool of pilots by having in place the required number of flight simulators and pilots training.

ALSO READ - What should an Ideal Air India Training Academy be like?

Air India earlier this year announced its plans to set up a training academy, which is a new initiative for the Tata Group. The academy, being headed by AirAsia India's former CEO Sunil Bhaskaran, will rival the biggest and the best anywhere in the world, Air India Managing Director and Chief Executive Officer Campbell Wilson had said.

"Over the coming years, the ambitious new Air India and aviation industry generally will require thousands of home-grown pilots, engineers, cabin crew, airport managers and other function specialists. As India's flagship airline, we have the need and duty to develop this talent," he had said earlier.

In recent years, India's civil aviation sector has witnessed significant growth, with passenger traffic reaching new heights. This growth has not gone unnoticed by American firms, which are now eyeing a share of India's civil aviation market pie. The potential for increased business in India has prompted several American aviation companies to explore opportunities in the country.

One of the significant developments in this regard is the US-India Open Skies agreement. Signed in 2005, this agreement allows airlines from both countries to operate an unlimited number of flights to and from any city in each other's country.

Since then, several American airlines, including United Airlines, Delta Airlines, and American Airlines, have increased their services to India.

American firms eye share of India's civil aviation market pie.

Another key factor driving American firms' interest in India's aviation market is the government's efforts to modernize the sector. The Indian government has been investing heavily in infrastructure development, including the construction of new airports and the expansion of existing ones.

Recently, Adani Enterprises, an Indian conglomerate, won the bid to operate six airports in the country, and the company has since entered into a strategic partnership with Elbit Systems, an American aviation company.

Additionally, the Indian government has relaxed regulations to allow foreign airlines to own up to 49% of Indian carriers, creating opportunities for American airlines to acquire stakes in Indian airlines.

American firms' interest in India's aviation market is the government's efforts to modernize the sector.

However, doing business in India's aviation sector can be challenging, given the country's complex regulatory framework, inadequate infrastructure, and fierce competition from domestic players.

Moreover, the COVID-19 pandemic has had a significant impact on the aviation sector globally, with passenger traffic dropping sharply. In India, the pandemic has led to the closure of several airports and airlines struggling to stay afloat.

Now, American firms are eyeing a share of India's civil aviation market pie, driven by the government's efforts to modernize the sector, the US-India Open Skies agreement, and the country's growing middle class. Nonetheless, the potential for growth in the sector makes it an attractive proposition for American companies looking to expand their global footprint.

Airbus, one of the leading aircraft manufacturers in the world, has set an ambitious target of delivering 720 planes in 2023. This target, which is higher than the number of planes it delivered in 2019, is a reflection of the company's confidence in the aviation industry's recovery.

However, Airbus also acknowledges that the industry's recovery might be slower and more feasible, given the supply chain snags caused by the COVID-19 pandemic.

Airbus on Thursday slowed the production ramp-up of key narrowbody models after supply disruption, but surprised investors and some suppliers by raising output ambitions for the widebody A350 as long-haul routes join a global travel recovery.

Airbus eyes slower, more feasible recovery after supply snags.

Airbus is coming off a challenging year in which the COVID-19 pandemic caused a sharp decline in air travel, leading to a drop in demand for new aircraft. The company delivered 566 planes in 2020, down from 863 planes in 2019.

Also read - Multiple Aircraft Types, Benefits Air India

To meet its target of 720 deliveries in 2023, Airbus is ramping up production across its aircraft lines. In addition, Airbus is also investing in new technologies and streamlining its manufacturing processes to increase efficiency and reduce costs.

Despite its optimism, Airbus acknowledges that the aviation industry's recovery might be slower and more feasible than originally anticipated. One of the key challenges facing the industry is the supply chain snags caused by the pandemic. Many suppliers have struggled to keep up with demand, leading to delays in the delivery of aircraft components.

Air India said on Tuesday it would start taking most of its 470 new Airbus and Boeing jets from mid-2025. 

To address these challenges, Airbus is working closely with its suppliers to ensure a steady flow of parts and components. The company is also investing in digital technologies, such as 3D printing and automation, to increase the efficiency of its supply chain and reduce the risk of disruptions.

In conclusion, Airbus's target of delivering 720 planes in 2023 is a reflection of the company's confidence in the aviation industry's recovery. However, the company is also aware of the challenges that lie ahead, particularly with regard to supply chain snags caused by the COVID-19 pandemic. By investing in production, supply chain management, and sustainable technologies, Airbus is positioning itself for long-term success in a rapidly changing industry.

Also read - From A350s to B777Xs, Air India finalizes the Historic 470 Aircraft deal with Airbus & Boeing