topStoriesenglish2541661

Vistara, Air India merger: Singapore Airlines to remain part of Tata Group-owned air carrier services

In a new development, it is confirmed that Singapore Airlines will be a part of the Tata Group-owned merged entity after Vistara and Air India's merger.

Vistara, Air India merger: Singapore Airlines to remain part of Tata Group-owned air carrier services

Tata group has made an important announcement on the Vistara and Air India merger, wherein Singapore Airlines will retain a 25.1 per cent stake in Air India. The deal will take the final shape by March 2024, post statutory approvals. Currently, Tata group hold a 51 per cent stake in Vistara, whereas the remaining 49 per cent stake is with Singapore Airlines. In a release, SIA said Vistara and Air India would be merged, and it would also be investing Rs 2,058.5 crore in Air India as part of the transaction. Also, Singapore Airlines has confirmed that it will fund the investment through its internal cash resources.

In a separate release, Tata group said that with the consolidation, Air India would be the country's leading domestic and international carrier with a combined fleet of 218 aircraft, "making it India's largest international carrier and second largest domestic carrier".

SIA and Tata Sons have also agreed to participate in additional capital injections, if required, to fund the growth and operations of the enlarged Air India in FY2022-23 and FY2023-24.

"Based on SIA's 25.1 per cent stake post-completion, its share of any additional capital injection could be up to Rs 50,200 million (S$ 880 million, US$ 615 million), payable only after the completion of the merger," SIA said in the release.

Also read - Air India removes THESE routes from its domestic flight network; Details here

The actual amount will depend on factors, including the progress of the enlarged Air India's business plan, and its access to other funding options. SIA intends to fully fund any additional capital injections with its internal cash resources, it added.

Tata Sons Chairman N Chandrasekaran said the merger of Vistara and Air India is an important milestone in the journey to make Air India a truly world-class airline.

"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. We are excited with the opportunity of creating a strong Air India which would offer both full-service and low-cost service across domestic and international routes," he said.

Four airlines are part of the Tata group. They are Air India, Air India Express, AirAsia India and Vistara. Tata group acquired Air India and Air India Express in January this year.

Vistara started flying in January 2015. AirAsia India was launched in 2014, while Air India Express began operations back in 2005.

In October, Vistara was the second largest carrier with a domestic market share of 9.2 per cent behind IndiGo, which had a market share of 56.7 per cent. During the same period, the domestic market share of Air India and AirAsia India stood at 9.2 per cent and 7.6 per cent, respectively.

Also read - GoFirst gets Rs 400 crore from government amid worrying flight disruptions and delays

In terms of On-Time Performance (OTP), Air India was on top at 90.8 per cent, followed by Vistara and AirAsia India, both at 89.1 per cent. On October 13, SIA said it was in "confidential discussions" with Tata group to explore the possible merger of Vistara and Air India.

"The discussions seek to deepen the existing partnership between SIA and Tata, and may include a potential integration of Vistara and Air India," it had said in a filing to the Singapore Stock Exchange.

SIA Chief Executive Officer Goh Choon Phong said that with this merger, SIA has an opportunity to deepen its 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, unlock its significant potential, and restore it to its position as a leading airline on the global stage," he added.

Talking about the merger, Vistara CEO, Vinod Kannan said, "

"We, at Vistara, take immense pride in embarking on this journey. Vistara is a fine manifestation of its parent brands Tata Sons and Singapore Airlines, and we are delighted that we will continue to be guided by their legacies as we merge with Air India. Vistara, within a short span of almost eight years, has created a unique space for itself, setting new standards in the Indian aviation market and earning extensive goodwill from millions of customers around the world. Air India is a legendary brand with a rich legacy that pioneered civil aviation in India. There is enormous potential for an airline group with the scale and network of the combined entity. We look forward to providing more opportunities for our customers, employees, and partners, while putting a spotlight on Indian aviation at the global stage. The integration process will take some time, and during this phase it will be business as usual for all our stakeholders including customers. We will continue to share relevant information with all of them, as appropriate."

With inputs from PTI

Live Tv

Trending news