Singapore Airlines (SIA) and Indian conglomerate Tata Sons (Tata) have agreed to merge Air India and Vistara, to create India’s leading airline group.
SIA will invest the equivalent of $250 million in Air India as part of the transaction, giving the Singaporean carrier a 25.1% stake in an enlarged Air India group.
Tata and SIA aim to complete the merger by March 2024, subject to regulatory approvals.
The merger would bolster SIA’s presence in India and strengthen its multi-hub strategy in a large and fast-growing aviation market.
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Goh Choon Phong, SIA chief executive, said: “Tata Sons is one of the most established and respected names in India. Our collaboration to set up Vistara in 2013 resulted in a market-leading full-service carrier, which has won many global accolades in a short time.
“With this merger, we have an opportunity to deepen our relationship with Tata and participate directly in an exciting new growth phase in India’s aviation market.
“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.”
Following its acquisition by Tata from the Indian government in January 2022, Air India unveiled a transformation programme to strengthen its foundations and revamp its operations.
Natarajan Chandrasekaran, Tata Sons chairman, commented: “The merger of Vistara and Air India is an important milestone in our journey to make Air India a truly world-class airline.
“We are transforming Air India, with the aim of providing great customer experience, every time, for every customer.
“We are excited with the opportunity of creating a strong Air India which would offer both full-service and low-cost services across domestic and international routes.”
Air India has valuable slots and air traffic rights at domestic and international airports that are not available to Vistara. Together, the two carriers have 218 aircraft, serving 38 international and 52 domestic destinations.
SIA has a 49% stake in New Delhi-based Vistara with the Tata Group owning the remaining 51%.
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