Singapore Airlines & Tata Group to go ahead with Air India & Vistara merger

An Air India Airbus in flight.
Anna Zvereva from Tallinn, Estonia, CC BY-SA 2.0, via Wikimedia Commons

LONDON – Singapore Airlines (SIA) and India’s Tata Sons have formally agreed to merge Air India and Vistara, effectively creating the nation’s leading airline group.

Singapore Airlines is to invest INR 20,585 million (US$250 million) in Air India as part of the merger arrangement. This will give SIA a 25.1% stake holding in the enlarged Air India conglomerate.

The investment will also position SIA with a significant presence across all key market segments. The proposal is for the two partners, Singapore Airlines and Tata Sons, to complete the airline merger by March 2024. This finalisation will be subject to regulatory approvals being granted.

SIA have stated that they intend to finance the investment by full funding with internal cash resources. These were reported as S$17.5 billion as at 30 September 2022.

Both partners have given an undertaking to participate in additional capital fund injections, if required, in order to support the growth and operations of the enlarged Air India conglomerate through financial years FY2022/23 and FY 2023/24.

Based on Singapore Airlines initial stake holding of 25.1%, its share of any additional cash injection will be up to INR 50,200 million (S$880 million, or US$615 million), which would be payable only after the completion of the merger.

The potential funding injection would be dependent upon the progress of the Air India conglomerate’s business plan. SIA has stated that it would fund any potential future funding injects with its internal cash resources.

Tata Group present holds a 51% stake holding in the other subject airline Vistara, with SIA holding a 49% share.

Tata Group statement


In a formal statement on the announcement of the merger arrangement, Tata Group chairman, N. Chandrasekharan 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 service across domestic and international routes. We would like to thank Singapore Airlines for their continued partnership.”

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