Air India's new flight plan: Where does Vistara fit?

Brand mergers are more than combining logos or pooling assets—they’re negotiations of history, reputation, and customer sentiment. The recent decision by Tata to phase out Vistara and fold it into Air India isn’t just about streamlining operations; it seems like a calculated move to create a flagship airline that merges modernity with legacy. But with Vistara’s distinct, premium appeal disappearing into the folds of an established, if outdated, Air India, it raises a complex question: will the unified airline manage to honour nostalgia while embracing progress?

Tata’s challenge in merging these two brands is no simple exercise in rebranding. Air India has been synonymous with Indian aviation for decades. It’s a name that’s woven into memories, family holidays, and even a national identity. Vistara, by contrast, is newer but has quickly captured the loyalty of premium travellers seeking a refined flying experience. Bringing these brands together means Tata has to modernise Air India without losing what made Vistara unique—a task that requires a subtle, almost intuitive understanding of customer sentiment.

When Hindustan Unilever (HUL) acquired GlaxoSmithKline Consumer Healthcare (GSKCH) in 2020, they faced a similar conundrum with Horlicks. Much like Air India, Horlicks carries with it a generational loyalty—a comforting sense of familiarity for many Indians. Instead of folding Horlicks into the HUL portfolio or revamping it, HUL chose to maintain Horlicks as a standalone brand. The decision kept Horlicks’ identity intact while allowing HUL to gradually infuse the product line with subtle health-focused messages that aligned with the changing wellness landscape. HUL’s approach worked because it preserved Horlicks’ legacy while gently nudging it toward a fresher, more contemporary positioning. For Tata, keeping some of Vistara’s distinctive attributes could likewise serve to bridge the gap between the nostalgia associated with Air India and the aspirations tied to Vistara.

A merger like this isn’t just a structural shift but a reconfiguration of emotional connections. Tata’s decision to unify under the Air India brand could result in a streamlined brand identity, yet there’s a risk. Where HUL relied on sub-brands to retain distinct market niches, Tata is choosing to bet everything on Air India’s unified name. A streamlined, singular brand might simplify operations, but it risks alienating Vistara’s premium clientele if not executed carefully. Brand loyalty is emotional at its core, and customers are rarely receptive to the idea of “one size fits all.” For instance, when Marriott acquired Starwood, they retained several of Starwood’s distinctive brands under the Marriott umbrella, recognising the diverse expectations of Starwood’s clientele. Tata’s strategy, however, seems to be rooted in the belief that one, cohesive Air India can embody both legacy and luxury—a bold, but risky move.

For Tata, then, this isn’t just about painting a fresh coat on Air India or adding routes. It’s about crafting a brand experience that resonates with both Air India’s loyal base and Vistara’s premium market. How Tata chooses to bring together these identities will define whether the new Air India soars on the wings of its heritage or struggles to find footing amidst evolving customer expectations. Brands like Air India, steeped in nostalgia, have a particular hold on their audience—a blend of pride and sentimentality that can’t be manufactured. Vistara, meanwhile, has set a standard in premium air travel that its customers now expect.

And yet, perhaps the most fascinating aspect of Tata’s approach is how it sheds light on a broader trend in brand integration within India. Unlike the consumer goods industry, where identity preservation is more feasible, service brands like airlines face a different challenge. There are no packaging tweaks or sub-brands to rely on here; every flight, every service interaction is part of the brand’s promise. Tata’s handling of loyalty programmes, service standards, and the very essence of what each brand represents will signal to the world whether they’ve managed to create something that’s more than the sum of its parts—or just a compromise.

This merger could become a blueprint for Indian brands tackling the art and science of integration. If Tata’s approach succeeds, it may redefine how legacy brands evolve, a case study in striking a balance between heritage and modernity. But if it falters, it will serve as a reminder of the risks in altering brand identity too drastically. Tata’s ambition to create a unified Air India that resonates across India’s vast flyer base is bold. The real question now: will this flight plan carry Air India forward—or bring it back to the gate?

This article is penned by Kruti Berawala, Co-Founder, Stratedgy.

Disclaimer: The article features the opinion of the author and does not necessarily reflect the stance of the publication.