Singapore Airlines has received Indian government approval for foreign direct investment, clearing a significant hurdle in the merger of airline Vistara, its 49%-owned joint venture with Tata Group, into Air India, Singapore Airlines said Friday (30 August).
The airline announced a plan to merge the decade-old Vistara and Tata-owned Air India in November 2022, in a bid to create a dominant full-service airline in the domestic and international markets. India is among the world’s fastest-growing major aviation markets. Global airlines are expanding flights to the country and Indian airlines last year placed record orders for hundreds of new planes, according to media reports.
Singapore Airlines said it expected the deal, which Indian and Singaporean antitrust regulators have cleared, to be completed by the end of 2024. That is delayed from the original target of March, and the airline said the companies were in talks about an extension to the agreed stop date of 31 October. Singapore Airlines, which is the only foreign airline with a direct stake in an Indian carrier, will hold a 25.1% stake in the combined Air India group in return for a $250 million investment. The Singaporean company is due to invest up to S$880 million ($675.42 million) after the merger is completed. India’s Tata took over flag carrier Air India in 2022 and embarked on a multi-million dollar transformation of the former state-run airline.
Singapore Airlines said in a statement that it “confirms that the Indian government has approved its proposed foreign direct investment into the enlarged Air India Group, as part of the ongoing merger of Air India and Vistara. This approval, along with other governmental and regulatory approvals received to-date, marks a significant development towards the completion of the merger. SIA and its partner Tata Sons aim to finalise the merger by the end of 2024. Upon completion, Singapore Airlines will hold a 25.1% stake in the enlarged Air India Group. SIA and Tata Sons are firmly committed to supporting the growth and success of the Air India Group, which post-merger will have a significant presence in all key Indian airline market segments (full service, low-cost, international, and domestic). This merger will reinforce SIA’s multi-hub strategy, and underscore its long-standing commitment to India through a direct stake in this large and rapidly growing aviation market.”
Vistara said starting on 3 September, customers will, progressively, no longer be able to make bookings with Vistara for travel on or after 12 November. All Vistara aircraft thereafter will be operated by Air India and bookings for the routes operated by these aircraft will be redirected to Air India’s website. Vistara will continue to take bookings and operate flights as usual till 11 November 2024. During this transition period, both Vistara and Air India will ensure necessary support, consistent communication, and convenience to all customers, every step of the way.
Vinod Kannan, Chief Executive Officer, Vistara, said, “We are immensely grateful to all our customers for their support and patronage over the last 10 years. As we progress further in our growth journey, we want to emphasise that this merger is about offering them more choice with a larger fleet and a wider network, while elevating the overall travel experience. Vistara and Air India are committed to ensuring that this transition is smooth and hassle-free. We are excited about this new phase in our journey and look forward to welcoming our customers again soon – as Air India.”
Campbell Wilson, Chief Executive Officer & Managing Director, Air India, said, “Cross-functional teams from Air India and Vistara have been working together for many months to make the transition of aircraft, flying crew, ground-based colleagues and, most importantly, our valued customers, into the new Air India as seamless as possible. The joint team looks forward to offering our guests an expanded network, additional flight options, an enhanced frequent flyer program and the best of both antecedent airlines and are grateful for the support of our loyal customers through this next phase of building a world class, world scale, global airline with an Indian heart.”
As the merger process moves ahead, regular updates will be shared with customers on the websites and social media channels of Vistara and Air India, and via e-mail. This includes information on web check-in, lounge access, ancillary services, and all other possible touchpoints. All efforts will be made by the dedicated teams across both airlines to ensure a smooth transition.
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