Singapore Airlines and Tata Sons have agreed to merge Air India and Vistara, with Singapore also investing $250 million in Air India as part of the transaction. Air India is owned by Tata Sons; Vistara is an Indian carrier jointly owned by Singapore and Tata Sons, with 49% and 51% stakes, respectively.
The investment by Singapore will give it a 25.1% stake in an enlarged Air India group with a significant presence in all key market segments. The companies aim to complete the merger by March 2024, subject to regulatory approvals.

Singapore and Tata Sons have also agreed to participate in additional capital injections, if required, to fund the growth and operations of the enlarged Air India over the next two years. Based on Singapore’s stake post-completion, its share of any additional capital injection could be up to $615 million, payable only after the completion of the merger.

Through this transaction, according to an announcement, Singapore will reinforce its partnership with Tata and immediately acquire a strategic stake in an entity that is four to five times larger in scale compared with Vistara. The merger would bolster SIA’s presence in India, strengthen its multi-hub strategy and allow it to continue participating directly in a large and fast-growing aviation market.

Goh Choon Phong, CEO of Singapore, said that with the merger the carrier has an opportunity to deepen its relationship with Tata Sons “and participate directly in an exciting new growth phase in India’s aviation market.” He said the companies will work together “to support Air India’s transformation program, unlock its significant potential and restore it to its position as a leading airline on the global stage.”

Natarajan Chandrasekaran, chairman, Tata Sons, said the merger is an important milestone in the company’s journey to make Air India a truly world-class airline. He said, “we are transforming Air India, with the aim of providing great customer experience, every time, for every customer.” As part of the transformation, he said, Air India is focusing on growing both its network and fleet; revamping its customer proposition; and enhancing safety, reliability and on-time performance.

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