Singapore Airlines Ltd-owned Vistara announces merger with Air India
On Tuesday, Singapore Airlines Lt (SIA) announced its plans to invest $250 million into India’s national carrier, Air India. The deal is as part of a merger of its Vistara full-service airline joint venture with Tata Sons.
Following the deal, the airline will emerge as Air India’s 25.1 per cent owner. Under the agreement, it stands to spend up to $615 million which as per reports will be stake, payable after the completion of the merger. The company said that it would fund the growth plans through its internal cash resources.
The Singaporean carrier in a statement said that subject to regulatory approvals, the two companies are aiming to complete the merger by March 2024. Additionally, the pair have agreed to “additional capital injections in Air India if required to fund growth and operations over the next two financial years”.
SIA in its official notification of the merger announced that it will also invest US$250 million (INR 20,585 million or S$360 million) in Air India as part of the transaction.
As per Reuters, the merger will create a strong rival for India’s dominant carrier IndiGo, while providing Singaporean airlines with a more solid foothold in “one of the world’s fastest-growing aviation markets”.
In addition, it will enable Tata to consolidate its brands around full-service Air India and low-cost Air India Express. The Indian conglomerate recently brought out its former partner AirAsia and their joint project AirAsia India is also being merged with Air India Express.
Tata Sons Chairman N Chandrasekaran in a statement called the merger an “important milestone” in the journey to make “Air India a truly world-class airline”.
He added that they are working to transform the national carrier “with the aim of providing great customer experience, every time, for every customer. As part of the transformation, Air India is focusing on growing both its network and fleet, revamping its customer proposition, enhancing safety, reliability, and on-time performance.”
Singapore Airlines Ltd’s Chief Executive Goh Choon Phong said “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”.
Currently, the Singaporean carrier owns a 49 per cent stake in the Tata SIA airlines which operate Vistara, while the rest is owned by Tata Sons.
(With inputs from agencies)
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