Vistara Airlines to merge with Air India by 2024

Mumbai: Singapore Airlines (SIA) and Tata Sons agreed to merge Air India and Vistara on Tuesday, with SIA gaining a 25.1% share in the merged firm and investing $250 million (Rs 2058.50) in Air India.

This stake will be in an enlarged Air India group, which would include Air India, Vistara, AirAsia India, and Air India Express. The merger of all airlines is scheduled for March 2024, pending regulatory approvals. Air India Express and AirAsia India are being merged into one low-cost airline.

“SIA plans to fund this investment with its S$17.5 billion in internal cash as of 30 September 2022. SIA and Tata have agreed to contribute to Air India’s growth and operations in FY2022/23 and FY2023/24. SIA’s share of any extra capital investment might be up to Rs 5,020 crore ($615 million), payable only after the merger, the company said Tuesday.

Actual amount will depend on Air India’s business plan and other financial possibilities. SIA plans to fund any additional capital injections with internal cash. The Indian Express stated on September 21 that a merger is being considered for 2024.

SIA will strengthen its cooperation with Tata and acquire a strategic position in a business four to five times larger than Vistara. The combination will boost SIA’s multi-hub strategy and allow it to continue engaging in a broad, fast-growing aviation market, the airline stated.

Tata Sons is a recognised Indian brand. In 2013, we collaborated to create Vistara, a market-leading full-service carrier that has won many global awards. With this combination, we may extend our partnership with Tata and participate in India’s aviation market’s growth. We will help Air India’s restructuring effort, unlock its potential, and reclaim its worldwide leadership position.” Singapore Airlines CEO Goh Choon Phong was quoted.

The combination of Vistara with Air India is a major step toward making Air India a world-class airline. We’re changing Air India to give every client a wonderful experience. Air India is transforming its network and fleet, reworking its consumer proposition, and improving safety, reliability, and on-time performance. We’re delighted to create a robust Air India that offers full-service and low-cost local and international services. We appreciate Singapore Airlines’ partnership.” Tata Sons Chairman Natarajan Chandrasekaran was quoted.

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