Confirmed! Tata Sons & Singapore Airlines Strike Deal To Merge Vistara With Air India By March 2024

More than a month after it spoke about ongoing discussions about it, Singapore Airlines has finally confirmed the much-anticipated Vistara-Air India merger.

Vistara To Get Merged With Air India

Singapore Airlines (SIA) said it would emerge as a 25.1% owner of Tata owned Air India as part of a deal that would merge its Vistara full-service airline joint venture with Tata Sons' Air India.

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The companies "aim to complete the merger by March 2024, subject to regulatory approvals," said the release, as per various media reports.

SIA could spend up to $615 million based on its 25.1% post-completion stake, payable after the completion of the merger, it said, adding it would fund the growth plans through its internal cash resources, as per an ET report.

The agreement will create a stronger rival to the country's dominant, carrier IndiGo and give the Singaporean airline, which lacks a domestic flying market, a more solid foothold in one of the world's fastest-growing aviation markets.

It will also allow the Indian conglomerate to consolidate its brands around full-service Air India and low-cost Air India Express, which is being merged with AirAsia India after Tata bought out former partner AirAsia.

SIA said it and Tata had agreed to participate in additional capital injections in Air India if required to fund growth and operations over the next two financial years.

"We will work together to support Air India's transformation programme, unlock its significant potential, and restore it to its position as a leading airline on the global stage," SIA Chief Executive Goh Choon Phong said, as per the report.

Last month, SIA said in a notification to the Singapore stock exchange "In line with its multi-hub strategy, SIA is currently in confidential discussions with the Tatas to explore a potential transaction in relation to the securities of Vistara and Air India. The discussions seek to deepen the existing partnership between SIA and Tatas and may include a potential integration of Vistara and Air India."

Tata Group To Bring All Airlines Under Air India

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Earlier this month, Tata Group¡¯s parent company Tata Sons had initiated the merger of all its airline entities-Vistara, AirAsia India, and Air India Express under Air India.

This was done after a series of discussions with Singapore Airlines (SIA), which is its joint venture partner in Vistara. This move will make Air India the second largest airline in the country in terms of fleet size and market share.

For the uninitiated, Tata Sons holds the majority (51% of the company) stake in Vistara and is also the holding company of the Tata Group. Ever since Tata Group brought back Air India earlier this year, various Tata Group companies have been assisting in Air India's revival.

With this merger, the Tata group is expected to have a low-cost carrier and a full-service airline under Air India. Air India will be the only airline brand in the Tata group following the merger.

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