Air India merger loses ₹72 billion
Air India and Indian Airlines merged in 2007, creating India's largest airline group, but the merger was plagued by IT chaos and ₹72 billion in losses by 2009. The merger had significant implications for Flying Returns members, who got a bigger route map but faced issues with the booking engine.
Air India and Indian Airlines became one company — National Aviation Company of India Ltd — on March 1, 2007, instantly creating India’s largest airline group by fleet and network. Two state carriers, two separate frequent-flyer programs, one merger on paper. In practice, the reservation systems, staff structures and FFP databases stayed stubbornly unmerged for years, and the mess piled up roughly ₹72 billion in losses by 2009.
Flying Returns members got the worst version of a merger: the bigger route map arrived on the brochure long before it arrived in the booking engine. Redemptions had to thread two half-integrated systems, and the combined program spent its formative years as an IT reconciliation project — chaos that directly foreshadowed the troubles around Air India’s later Star Alliance bid.
Our take: mergers are pitched to members as “more destinations” and delivered as years of broken plumbing — SPG/Marriott re-ran the same movie in 2018. When two programs announce they’re combining, don’t wait for the harmonised program: burn to your best available redemption before the systems cut over, screenshot your balances, and chase anything that goes missing immediately. The bigger network will still be there when the plumbing works; stranded miles often aren’t.