Air India-Vistara merger: Singapore Airlines’ $276 mn investment okayed

The government of India has approved a $276 million investment by Singapore Airlines in the new Air India Group, to be formed after the merger of Air India and Vistara. Singapore Airlines, which currently has joint ownership of Vistara with the Tata Group, will have a 25.1 per cent stake in the new Air India Group.

The Singapore carrier stated in a filing that Air India expects to close the merger deal by the December end this year. The Foreign Direct Investment (FDI) deal will involve merger of staff, aircraft and routes of the two airlines.

On Friday, Tata SIA Airlines, which operates under the brand name of Vistara, issued a statement officially announcing its merger with Air India.

“Starting 03 September 2024, customers will, progressively, no longer be able to make bookings with Vistara for travel on or after 12 November 2024,” the announcement said.

Vistara will, however, accept bookings and carry on with regular flights till November 11. The company’s flights will be managed by Air India and bookings will be done through the Air India website, the statement added.

Investing in the new Air India Group is in sync with the current strategy of Singapore Airlines to enter into tie-ups with various carriers such as Garuda Indonesia and Malaysia Airlines. Currently, Talks are on for a deal between Singapore Airlines and All Nippon Airways of Japan.

The Air India-Vistara merger will help Singapore Airlines broaden operational and business base beyond its comparatively smaller domestic market.

Deliberations over the merger of Vistara and Air India had been going on for over a year and a half. Finally, on August 10 this year, the Directorate General of Civil Aviation (DGCA) gave the two carriers permission to secure CAR (Civil Aviation Requirement) 145 approval, which is mandatory for the merger of maintenance operations.