India approves $276 million investment by Singapore Airlines in Air India-Vistara merger

New Delhi August 30 2024 : In a significant step for the global aviation industry, India has approved the final regulatory requirement for the merger of Air India Ltd. with its smaller competitor, Vistara. This approval includes a substantial foreign direct investment (FDI) of $276 million by Singapore Airlines Ltd. as part of the merger agreement. The Indian government’s clearance marks the culmination of a lengthy approval process that has spanned over 18 months. The $360 million investment by Singapore Airlines will see the carrier acquiring a 25.1% stake in the newly expanded Air India Group. This move is poised to consolidate Air India’s position in the industry, creating one of the world’s largest airline groups.

Singapore Airlines, which holds a joint venture with the Tata Group in Vistara, anticipates finalizing the merger by the end of 2024. This merger will integrate the operational aspects of planes, staff, and routes, significantly boosting Air India’s market presence and operational capacity. The merger approval is a notable milestone for Singapore Airlines, which has been actively seeking to expand its global footprint. The investment provides Singapore Airlines with greater exposure to one of the fastest-growing travel markets globally. This strategic move also enhances the airline’s ability to recover and expand beyond its smaller domestic market, which suffered during the COVID-19 pandemic. In recent years, Singapore Airlines has been consolidating its position through various strategic alliances, including joint ventures with Malaysia Airlines and Garuda Indonesia, and is exploring similar partnerships with Japan’s All Nippon Airways.

The Air India-Vistara merger first came to light in November 2022 and has since navigated a complex regulatory landscape. The National Company Law Tribunal (NCLT) granted approval in June, while Singapore’s competition regulator, the Competition and Consumer Commission of Singapore (CCCS), gave conditional approval in March. The Competition Commission of India (CCI) followed with its approval in September 2023. Despite these approvals, Singapore Airlines noted that the merger’s completion is contingent on meeting all Indian legal and regulatory requirements. The airline is also in discussions to possibly extend the original completion deadline set for October 31, 2024.

Singapore Airlines has committed to providing updates on the merger’s progress and any significant developments. The deal not only underscores the growing interconnectedness of global airlines but also highlights Singapore Airlines’ strategic efforts to bolster its international presence.