Airlines

Vistara prepares to merge staff into Air India, CEO confirms

As the nation’s industrial Tata family combines the two airlines to rebuild its aviation empire and challenge market leader IndiGo, India’s Vistara airline has started making steps to merge its workforce into Air India Ltd.

Vinod Kannan, the CEO of Vistara, told on Monday that “the process of integrating the staff has started.” He anticipates that regulatory approvals will be finished by April 2024, confirming an earlier claim that Indian officials had expressed antitrust concerns.

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According to a deal announced in November, Vistara, which is now controlled jointly by Tata Group and Singapore Airlines Ltd., will be merged with Air India, giving the Tatas additional strength to compete with dominant low-cost carrier IndiGo. In exchange for its interest in Vistara and a $250 million investment, Singapore Air will obtain a 25.1% ownership in the combined company.

Due to limitations in the nation’s competition rules, Mr. Kannan said Vistara has assembled a team to debate what should be the “end structure” of the integrated organization. The airline is informally discussing the merger process with its pilots and cabin crew while also submitting an application to Singapore’s competition authorities.

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When the merger is finalized, Vistara, which will have a fleet of 70 aircraft, wants to add capacity to Dubai, Bali, and Bahrain, according to Mr. Kannan. The airline has a fleet of 61 aircraft, including four bigger Boeing 787-9 Dreamliners and 12 Airbus SE A320neo narrowbodies.

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Airlines

German Carrier Lufthansa Plans for 20% Job Cuts in Administration

Lufthansa Airlines is reportedly planning significant job cuts in its administrative workforce. According to Manager Magazin, the German carrier intends to reduce administrative positions by 20% as part of its cost-cutting measures amidst an anticipated decline in earnings.

This reduction could impact approximately 400 jobs, the report revealed. While Lufthansa has not directly commented on the layoffs, the airline confirmed its goal of cutting administrative costs by 20% by 2028.

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The strategy involves leveraging digital technologies, including artificial intelligence and automation. “A hiring freeze is currently in place for administrative roles at Lufthansa Airlines,” said a company spokesperson.

The staff reduction is expected to occur through natural attrition and age-related turnover, rather than forced layoffs. The internal projection cited by the magazine warns that Lufthansa could face an operating loss of €800 million ($843.92 million) by 2026 if no corrective measures are taken.

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The report highlights the challenges companies face in aligning workforce requirements with current and future demands. Failure to adapt could necessitate drastic actions, such as restructuring and layoffs, which carry significant repercussions for both the organization and its employees.

As Lufthansa navigates these challenges, the airline appears committed to balancing cost efficiency with digital transformation to maintain its competitiveness in a rapidly evolving industry.