The country’s oldest airline, Air India is expected to get a better handle on costs post its merger with Vistara, the joint venture between Tata Sons and Singapore Airlines (SIA). While aviation experts agree that the merger of the two is a sound business decision, there is scepticism about bringing together two entirely different brands under one entity. Air India today is a far cry from its former days of glory with many question marks hanging over the service and performance of the loss-making airline. The nine-year-old Vistara, on the other hand, has been successful in winning consumer confidence and building a premium brand in a relatively short period of time.
It is pertinent to note that past mergers in Indian aviation, such as Jet Airways-Air Sahara and Kingfisher Airlines-Air Deccan have been unsuccessful for a host of reasons. The challenge before the Tatas is not just to ensure a profitable new Air India, but to also win back consumer confidence. The company has reportedly enlisted London-based consultancy firm, Futurebrands to give the carrier a brand makeover.
David & Goliath
Post consolidation, SIA will hold a 25% stake in Air India, which is expected to make it India’s largest international airline and second largest domestic carrier. Speaking about the brand synergies that exist between the two carriers, Santosh Padhi, chief creative officer, Wieden+Kennedy India, notes that both Air India and SIA are giants in the aviation segment and in their respective countries. “Both Vistara and Air India can benefit from the merger. Air India will bring its legacy and the pride of being a national carrier, while Vistara will bring modernity and a premium consumer experience,” he observes. He points out that Vistara has been able to create a strong brand image because it is a younger airline that was built from scratch, unlike Air India, which has had its fair share of ups and downs over the decades of its existence. The Tatas will need to build on the airline’s strong brand attributes and let go of the qualities that bring it down.
Various studies show that one in two flyers in India believe that flying has become transactional and consumers are willing to pay more to return to the good old days when flying was a special feeling. This is something that a new Air India should tap into, remarks Sourav Ray, chief strategy officer at Cheil India. “A great home airline does evoke a sense of pride for all of us. Vistara will bring a higher quality of service, punctuality, modern fleet and a premium experience like three cabin class. The Tatas will bring trust and pride, and SIA will bring the international stature and hospitality it is famous for,” notes Ray. The three can play a key role in revamping Air India brand and making it world-class.
Once the brand identity and vision have been framed, Air India will need a clean start and a clear re-launch strategy. With more and more Indians travelling internationally these days, the new brand communication should be modern and in line with successful, established international carriers. “We are moving in a fast moving world, so the new brand will not have much time to prove itself especially in a challenging industry like aviation. If they establish the new brand identity and vision for Air India quickly, the Tatas can easily overshadow the past and the negativity associated with the airline,” states Padhi.
“Trust remains common to Air India and Vistara, and the new Air India must leverage this, while adopting many other positive attributes that Vistara represents. Otherwise, this runs the risk of becoming a story where a new brand with some sheen (and operational issues) was sacrificed to revive an old brand,” cautions Mithila Saraf, business head, Famous Innovations.