Vistara and Air India Merger Discussions Begin

[In The News]

DALLAS – Singapore Airlines (SQ) and Tata Group, the joint owners of Indian full-service airline Vistara (UK), have revealed they are looking at a possible merger of UK with Air India (AI).

In an official stock market announcement, SQ stated, “SIA is currently in confidential discussions with Tata to explore a potential transaction in relation to the securities of Vistara and Air India Ltd, a subsidiary of Tata. The discussions seek to deepen the existing partnership between SIA and Tata, and may include a potential integration of Vistara and Air India.”

It said those discussions aligned with its multi-hub strategy to secure access to important sources that complement its strong Singapore hub. It added that talks were ongoing, and both parties had made no final decision.

It also noted that the merger would be subject to the relevant regulatory approvals, even if a deal were finalised.

Vistara Growth

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SQ holds 49% of Vistara shares, while the Tata Group has the majority 49% share. The pair created the airline in 2013 to launch a full-service, scheduled airline in India to compete with the nation’s troubled flag carrier.

Vistara Airbus A320. Photo: Ratchapon Pipitsombat/Airways.

Since its inaugural flight on January 9, 2015, UK has grown to operate a fleet of 54 aircraft on a network serving 43 destinations across 12 countries.

The combined carriers would form a strong competitor to India’s largest airline Indigo (6E). SQ said that India had a strong domestic and international market, one which is expected to double over the next ten years.

Logical Next Step

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Tata Group, whose predecessors had created the airline back in 1932, took control of troubled AI back in January 2022. the airline had raked up losses of more than US$9.5 billion. Air India called the deal a “brand new chapter” in its history. “Two iconic names come together to embark on a voyage of excellence,” it said in a statement.

AI and UK have similar fleets including Airbus A320 family aircraft. Photo: Alberto Cucini/Airways.

Since then, there has been much discussion of AI’s and the UK’s future. Currently, both are competing directly in several markets. Closer cooperation was already on the cards, and now the possibility of a full merger is on the table.

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Featured Image: Both AI and UK operate the Boeing 787. Photo: Tony Bordelais/Airways.

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