This case study, prepared for the Finance and Economics Club at IIT Guwahati, focuses on the strategic merger between Air India and Vistara, aimed at creating a stronger full-service airline in India’s rapidly growing aviation market .

The analysis evaluates the strategic rationale, financial viability, and post-merger positioning of the combined entity. It highlights how the merger leverages complementary strengths,Air India’s international network and Vistara’s premium service quality, to build a competitive alternative to market leader IndiGo.

The study includes a comprehensive industry analysis (2024–2030 outlook), identifying strong growth potential driven by increasing passenger demand, government infrastructure investments, and aviation liberalization policies. It further examines synergy opportunities exceeding ₹5,000 crore, driven by cost optimization (fleet, operations, procurement) and revenue enhancements (network expansion, pricing power, and loyalty programs).

A detailed financial evaluation using DCF and sensitivity analysis assesses valuation outcomes and investment attractiveness, while a synergy realization model projects break-even within ~3.5 years. The case also explores stakeholder impacts, integration risks (cultural alignment, system compatibility, employee retention), and mitigation strategies critical for execution success.

Finally, the study presents a post-merger strategy roadmap, including fleet harmonization, international expansion, customer experience transformation, and loyalty program integration, positioning the merged entity as a scalable and globally competitive airline.