MELBOURNE, 29 November 2022: Singapore Airlines (SIA) will by March 2024 own Tata Sons (Tata) owned (formerly public sector) Air India. The SIA and Tata have agreed to merge Air India and Vistara, owned jointly by SIA and Tata, and the SIA investing INR (Indian Rupees) 20.585 million (S$360 million, US$250 million) in Air India as part of the transaction.
“This would give the SIA a 25.1% stake in an enlarged Air India group with a significant presence in all key market segments. SIA and Tata aim to complete the merger by March 2024, subject to regulatory approvals. Currently, SIA and Tata hold a 49% and 51% stake in Vistara respectively. Tata wholly owns Air India which includes the low-cost carriers Air India Express and AirAsia India, ” says a media release from Singapore Airlines.
SIA intends to fully fund this investment with its internal cash resources, which stood at S$17.5 billion as of 30 September 2022.
SIA and Tata 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% stake post-completion, its share of any additional capital injection could be up to INR 50,200 million (S$880 million, US$615 million), payable only after the completion of the merger.
Mr. Goh Choon Phong, Chief Executive Officer, Singapore Airlines, said: “Tata Sons is one of the most established and respected names in India. Our collaboration to set up Vistara in 2013 resulted in a market-leading full-service carrier, which has won many global accolades in a short time.
“With this merger, we have an opportunity to deepen our 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 programme, unlock its significant potential, and restore it to its position as a leading airline on the global stage.”
Mr. Natarajan Chandrasekaran, Chairman, Tata Sons, said: “The merger of Vistara and Air India is an important milestone in our journey to make Air India a truly world-class airline. We are transforming Air India, with the aim of providing great customer experience, every time, for every customer. 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 services across domestic and international routes. We would like to thank Singapore Airlines for their continued partnership.”
The media release adds: “Today, Air India (including Air India Express and AirAsia India) and Vistara have a total of 218 widebody and narrowbody aircraft, serving 38 international and 52 domestic destinations. With the integration, Air India will be the only Indian airline group to operate both full-service and low-cost passenger services. It can optimise its route network and resource utilisation, be flexible and agile in capturing demand across market segments, and tap on a larger consumer base to strengthen its loyalty programme.”
