Vistara – Air India merger approved by the CCI

A Vistara Airbus lined up on the runway for takeoff.
Md Shaifuzzaman Ayon, CC BY-SA 4.0, via Wikimedia Commons

On Friday, September 1, the Competition Commission of India (CCI) announced they have given their approval in the case of the Air India – Vistara merger plans; making the combination and creation of a leading airline group imminent.

The formal decision to merge the two airlines was made in November of last year, as Singapore Airlines and the Tata Group decided to go forward with the merger plans, which at the time were subject to approval.

The latest advice from the CCI updates this, giving the Group the approval to proceed with plans.

Air India & Vistara – A leading airline group

As made public by the Competition Commission of India on September 1, the plans to merge Air India and Vistara to create a leading airline group have been approved.

Inside the document issued by the Competition Commission of India, it is known that Vistara will be the dissappearing part in this merger, as the airline will be transferred into Air India, which in this merger acts as the surviving part.

Vistara is currently a joint venture between Tata Sons Private Limited and Singapore Airlines, which hold 51% and 49% of shares in the company respectively, however its is currently unknown if and in that case what stakes the companies will hold post-merger.


A new Tata Group Air India Airbus A321neo on the tarmac.
Photo Credit: Air India via Twitter

The “green-light” – November 2022

It was reported by AviationSource in November of 2022 that Singapore Airlines (SIA) and India’s Tata Sons had formally agreed to merge Air India and Vistara, creating the nation’s leading airline group.

Singapore Airlines was also reported to invest INR 20,585 million (US$250 million) in Air India as part of the merger arrangement. Thus giving 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.

A Vistara Airbus A320neo parked on the tarmac.
Photo Credit: Vistara

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’s 2022 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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