In a major consolidation in the Indian aviation space, Tata Group announced on Tuesday the merger of Vistara and Air India. As a result of the deal, a major source of air transportation for Indian passengers is cheap international flight tickets, and Singapore Airlines will have a 25.1% stake in Air India.
According to a press release, SIA (Singapore Airlines) will unite Vistara with Air India to benefit travelers booking all sorts of flights. Including last minute flight deals to India from USA, it would also contribute Rs 2,058.5 crore to Air India as part of the deal.
The proposed transaction is expected to close in March 2024, subject to regulatory approvals.
The Tata Group owns 51% of Vistara, while Singapore Airlines owns the remaining 49%.
SIA stated that it intends to fund this investment entirely with internal cash resources. That is 17.5 billion Singapore dollars as of September 30.
According to a subsequent update from Tata Group, with a combined fleet of 218 aircraft. For passengers looking for cheap international flight tickets, Air India will be the country’s largest domestic and international airline, “As a result, it is India’s largest international carrier and its second-largest domestic carrier.”
SIA and Tata Sons have also agreed to participate in additional capital injections. If necessary, to fund the expansion and operations of the enlarged Air India in FY2022-23 and FY2023-24.
Singapore Airlines stated 25.1% of equity & plans to share additional invented capital. This could be around Rs 50,200 million (S$ 880 million, US$ 615 million). Payable only when the deal is final,” the CEO added.
The actual amount will be determined by factors such as the progress of the enlarged Air India’s business plan and its access to other funding options. SIA intends to fund any additional capital injections entirely with internal cash resources, it added.
N Chandrasekaran, Chairman of Tata Sons, stated that the merger of Vistara and Air India is an important step toward making Air India a truly world-class airline.
“Air India is working on growing its connections and fleets. Rethinking its customer offering, and removing risks, reliability, and on-time performance as part of its shift.” “We are excited about the prospect of building a strong Air India. This will offer both full-service and low-cost service on both domestic and international lines, such as flights from the United States to India,” he added.
Tata Group includes four airlines. Air India, Air India Express, AirAsia India, and Vistara provide all flight services for passengers with cheap international flight tickets. The Tata Group owns Air India and Air India Express in January of this year. You can visit Flyopedia.ca for flights from Canada to India.
Vistara began operations in January 2015. AirAsia India began operations in 2014, whereas Air India Express began operations in 2005.
Vistara was the second largest carrier in October, with a domestic market share of 9.2 percent, after IndiGo, which had a market share of 56.7 percent.
During the same period, Air India and AirAsia India had 9.2 percent and 7.6 percent of the domestic market, respectively.
In terms of On-Time Performance (OTP), Air India led the pack with 90.8%, followed by Vistara and AirAsia India, both with 89.1%.
On October 13, SIA stated that it was in “secret conversations” with the Tata group to investigate the possibility of a Vistara-Air India merger.
“The conversations seek to extend the existing collaboration between SIA and Tata. It may also include a future merging of Vistara and Air India,” it stated in a filing to the Singapore Stock Exchange.
SIA Chief Executive Officer Goh Choon Phong stated that with this merger, SIA will be able to deepen its relationship with Tata. Also, it will be able to participate directly in an exciting new growth phase in India’s aviation market.
Also read: Top Secret Hacks To Book Cheap Flight Tickets To India
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