TNI Bureau: As part of a deal to combine its Vistara full-service airline joint venture with Tata Sons into India’s national carrier, Singapore Airlines Ltd. (SIA) said on Tuesday that it will become a 25.1% stakeholder of Air India.
SIA will contribute $250 million to Air India as part of the deal, according to a statement from the Singaporean airline. Subject to regulatory approvals, the merger is expected to be finalized by March 2024.
The partnership will pose a big challenge to IndiGo and provide Singapore Airlines, which lacks a domestic flying market, a stronger footing in one of the aviation industry’s fastest-growing markets.
Additionally, it will enable the Indian conglomerate to strengthen the brands associated with full-service Air India and low-cost Air India Express, which is joining forces with AirAsia India after Tata acquired erstwhile partner AirAsia.
Tata SIA Airlines, which runs Vistara, is owned by the Indian conglomerate and SIA holds 49% of it. According to SIA, it and Tata have agreed to take part in future capital infusions into Air India if necessary to fund expansion and operations over the following two fiscal years.
According to its 25.1% post-merger stake, which is payable when the merger is complete, SIA might spend up to $615 million, it said, adding that it would finance the growth plans with its own internal cash resources. In the SIA statement, Tata Sons Chairman Natarajan Chandrasekaran expressed his company’s excitement about forging a stronger Air India in collaboration with the Singaporean airline.
