The Competition Commission of India (CCI) has granted approval for the merger of Tata Group’s airlines, Vistara and Air India, on September 1, 2023, subject to specific conditions. This merger could position Air India as India’s largest international carrier and the second-largest domestic airline, following IndiGo.
The CCI’s approval was posted on social media platform X, confirming the merger of Tata SIA Airlines into Air India and the acquisition of certain shareholdings in Air India by Singapore Airlines (SIA). However, the approval is contingent on the parties adhering to voluntary commitments made during the process.
This decision follows a period of uncertainty and scrutiny, as the CCI had issued a show cause notice to Air India in June, seeking clarification on the proposed merger with Vistara amid concerns about competition in the aviation sector.
For Tata Group, this approval represents a significant step toward consolidating its aviation business. Vistara and Air India are both full-service airlines under the Tata Group umbrella, with Singapore Airlines (SIA) holding a 49 percent stake in Vistara.
As part of the merger, SIA will invest Rs 205,900,000 in the expanded share capital of Air India, acquiring a 25.1 percent stake. Tata Sons will retain the remaining 74.9 percent stake in the combined entity. Tata Sons and SIA submitted the merger application to the CCI in April, asserting that the merger would not have a negative impact on competition in India’s aviation sector. They aimed to finalise the merger by March 2024.
This merger strengthens SIA’s partnership with Tata and grants it a strategic stake in an entity several times larger in scale than Vistara. It is expected to enhance SIA’s presence in India, support its multi-hub strategy, and allow it to continue participating in a rapidly growing aviation market.
This post was published on 1 September 2023 22:53
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