With the Air India-Vistara airline merger securing approval, Air India is on track to become the second-largest domestic airline in the country.
CCI has approved the merger of Tata Singapore Airlines (SIA) into Air India, and acquisition of certain shareholdings by Singapore Airlines in Air India subject to compliance of voluntary commitments offered by the parties.
The Tata group has considered this a major step towards expanding its airline business. With this approval, Air India can potentially become country’s largest international carrier and second-largest domestic airline after IndiGo.
Vistara and Air India, two full-service airlines, are part of the Tata Group. Singapore Airlines (SIA) holds a 49 percent stake in Vistara. s a part of the deal, SIA would pump into Rs 2,059 crore in the expanded share capital of Air India for a 25.1 percent stake. Tata Sons would own the remaining 74.9 percent stake in the combined entity.
The merger is expected to 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.
Meanwhile, aviation research and advisory firm CAPA India had earlier said the merger will “redraw market and consumer power in the international arena to Indian carriers”, which has historically been dominated by foreign carriers.
Following the merger, CAPA India says, it expects to see the emergence of Air India as a global network carrier in terms of size, scale and quality “in the next six years”. The airline could garner a market share of “50 percent in international traffic”