Tata Sons announces merger of Vistara with Air India

SIA would contribute $250 million to Air India as part of the deal, according to a statement from the Singaporean airline. Subject to regulatory approvals, the merger is expected to be finalised by March 2024.

As part of a deal to combine its Vistara full-service airline joint venture with Tata Sons into India’s national carrier, Singapore Airlines Ltd. (SIA) said on Tuesday that it will become a 25.1% stakeholder of Air India.

SIA would contribute $250 million to Air India as part of the deal, according to a statement from the Singaporean airline. Subject to regulatory approvals, the merger is expected to be finalised by March 2024.

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The deal will strengthen IndiGo, the biggest airline in the nation, and offer the Singaporean airline, which lacks a domestic flying market, a firmer footing in one of the aviation sectors that is expanding the quickest in the globe.

Additionally, it will enable the Indian conglomerate to strengthen the brands associated with full-service Air India and low-cost Air India Express, which is joining forces with AirAsia India after Tata acquired erstwhile partner AirAsia.

Tata SIA Airlines, which runs Vistara, is owned by the Indian conglomerate and SIA holds 49% of it.

According to SIA, it and Tata have agreed to take part in future capital infusions into Air India if necessary to fund expansion and operations over the following two fiscal years.

According to its 25.1% post-merger stake, which is payable when the merger is complete, SIA might spend up to $615 million, it said, adding that it would finance the growth plans with its own internal cash resources.

“We will work together 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,” SIA Chief Executive Goh Choon Phong said.

In the SIA statement, Tata Sons Chairman Natarajan Chandrasekaran expressed his company’s excitement about forging a stronger Air India in collaboration with the Singaporean airline.