In last two decades, the Indian aviation has seen four M&A – Kingfisher Airlines and Air Deccan; Jet Airways and Air Sahar; forced merger of Air India and Indian Airlines and most recently being of Air India and Vistara. <\/p>\n\n\n\n
Although the companies were from same industry and were joined through different legal paths, they have all faced or facing the most difficult challenge of partnership: how to combine two corporate cultures into one cohesive team. From the above examples we can safely say that degree of success during M&A transition depends not on their business prowess, a healthy cash balance or a charismatic leader. To a large extent it depends on creating a team from two different companies which largely rests with the ability of the leadership\u00a0team to anticipate problems, ease the transition and engage the workforce in a new vision and mission.<\/p>\n\n\n\n
M&A deals often involve merging two distinct organisational cultures. The management team plays a critical role in facilitating a smooth integration and ensuring cultural alignment<\/strong>. They lead by example, promoting open communication, transparency, and collaboration.<\/p>\n\n\n\n Indian aviation market is one of fastest growing market in the world. M&A in the aviation means increased market shares, optimisation of resources, reduction in operating costs and increase profits. Under these circumstances it looks like a very easy target to achieve. However, they all make one mistake of ignoring human capital. <\/p>\n\n\n\n According to a Harvard Business Review study, up to 90 percent of mergers and acquisitions fail to achieve the original objectives of the transaction. <\/strong>Companies face cultural differences (customer centric to product centric), different management style (bureaucratic or democratic). The employees face uncertainity or in simple terms are not sure of its impact on<\/p>\n\n\n\n It is common to ignore above very important aspect which affects every professional. The present saga of large number of cancellation or delay in Vistara flights seems to be mirroring this very concern. In this blog, I will enumerate the way forward. <\/p>\n\n\n\n To join the 10 percent of companies that successfully achieve their objectives during a merger or acquisition process, it\u2019s essential to select a Leadership Team which is involved from the start, works within the guidelines of regulations and brings about a cultural change to meet the vision of new entity. Not easy huh…..<\/p>\n\n\n\n Happy Landings. Jai Hind. <\/p>\n\n\n\n <\/p>\n\n\n\n View my insights on pilot crisis vis-a-vis the M&A in aviation industry, click here<\/a>.<\/p>\n\n\n\n To access my earlier blog on the same subject, click here.<\/a> <\/p>\n\n\n\n