Skip to content

India’s Tata Group to merge Air India with Vistara airlines

Singapore Airlines Ltd (SIA) announced on November 29, 2022, that it would become a 25.1% owner of Air India, as part of a deal that would merge its Vistara full-service airline joint venture with Tata Sons into India’s national carrier.

SIA will invest $250 million in Air India as part of the transaction, according to a statement from the Singaporean carrier, with the pair aiming to complete the merger by March 2024, subject to regulatory approvals.

The agreement will create a stronger competitor to the country’s dominant carrier, IndiGo, and will provide the Singaporean airline, which does not have a domestic flying market, with a more solid foothold in one of the world’s fastest-growing aviation markets.

It will also allow the Indian conglomerate to focus its brands on full-service Air India and low-cost Air India Express, which is being merged with AirAsia India following Tata’s acquisition of former partner AirAsia.

SIA owns 49% of Tata SIA Airlines, which operates Vistara, and the rest is owned by the Indian conglomerate.

SIA and Tata agreed to participate in additional capital injections into Air India if necessary to fund growth and operations over the next two fiscal years, according to the company.

SIA said it could spend up to $615 million based on its 25.1% post-merger stake, which is payable after the merger is completed, and that it would fund the growth plans with internal cash resources.

“We will collaborate 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,” said SIA CEO Goh Choon Phong.

Tata Sons Chairman Natarajan Chandrasekaran stated in the SIA statement that his company was excited to collaborate with the Singaporean carrier to build a stronger Air India.

Leave a Reply

Your email address will not be published. Required fields are marked *