Vistara and Air India to merge by March 2024: Tata Group
Tata Group on Tuesday made an important announcement about the merger between Vistara and Air India, with the result that Singapore Airlines will retain a 25.1 percent share in Air India. In the event of statutory approvals, this agreement is expected to be completed in March 2024.
It’s important to note it is Tata Group is the Tata Group currently owns 51 percent of Vistara while Singapore Airlines owning the remaining 49%..
Air India-Vistara Merger
In an announcement, SIA stated that Vistara and Air India would be merged and that it plans to invest the sum of 2,058.5 billion into Air India as part of the deal. Singapore Airlines has also confirmed that the investment will be financed with internal reserves in cash.
In a different statement in a separate statement, the Tata group stated that following the merger, Air India would be the top international and domestic airline with a an overall fleet of 218 aircraft “making Air India India’s most international airline and the second-largest domestic carrier”.
SIA along with Tata Sons have also agreed to join in further capital injections, if needed for the financing of the expanded Air India’s operations and growth for FY2022-23 as well as FY2023-24.
“Based upon the SIA’s 25.1 percent stake after completion the company’s share of any capital injections that are added to the mix could be as high as Rs 50,200 crore (S800 million dollars, USUSD 615 millions) and payable only upon the merger is completed,” SIA stated in its press release.
The exact amount can be determined by number of factors, such as the development of the expanded Air India’s business strategy and its access to other sources of financing. SIA will finance any further capital investment completely through internal cash resources.
The merger between Vistara as well as Air India, according to Tata Sons Chairman N Chandrasekaran is a significant step in the direction of creating Air India a truly world-class airline.
Tata Group now part of four airlines
After the acquisition of the national airline from India, Air India, and Air India Express in January of this year, Tata Group is now component of four carriers that also includes Vistara as well as AirAsia India.
Vistara started operations in January of 2015. AirAsia India began operations in 2014, and Air India Express began operations in 2005.
Recently Tata Group announced plans to merge with Air India Express. Tata Group revealed plans to combine cheap airlines AirAsia India with Air India Express as an affiliate that is part of Air India Limited that is currently controlled by Tata.
On the 13th of October, SIA stated that it was currently in “confidential conversations” in talks with Tata group to explore the possibility of the possibility of a Air India-Vistara merger.
The discussions aim to enhance the current relationship with SIA Tata and Tata and could be a possibility of a merger between Vistara along with Air India,” it stated in a report for the Singapore Stock Exchange.
SIA Chief Executive Chief Executive Goh Choon Phong said that by acquiring Tata, SIA has an opportunity to strengthen its relations with Tata and be a part of the exciting growth phase in the Indian aviation market.
“We will cooperate to assist Air India’s transformation and unlock its enormous potential and return it to its status as a top airline in the world,” he added.
