Singapore Approves Air India-Vistara Merger

08 Mar 2024 CW Team

Air India and Vistara have committed to maintaining the capacity levels as of 2019 on routes connecting Singapore to Delhi, Mumbai, Chennai, and Trichy, as per the directives of the CCCS.

This move further solidifies the consolidation efforts within the Tata Group's airline business. In collaboration with Singapore Airlines (SIA), Tata Sons will merge Vistara with Air India, aiming to establish India's second-largest carrier. SIA will hold a 25.1% stake in the entity, injecting an equity infusion of Rs 205.85 billion, while Tata will retain the remainder.

The merger forms part of Tata Sons' strategy to streamline its conglomerate's businesses and enhance operational efficiency. In a statement, the CCCS expressed satisfaction with the proposed commitments, considering them adequate to address competition concerns arising from the merger, and subsequently granted its approval. Earlier, the CCCS had conducted a market testing exercise to evaluate the proposed commitments' sufficiency in addressing competition concerns. While most stakeholders did not raise objections, one did express concerns.

In a preliminary review, the CCCS had voiced apprehensions regarding Tata Group's acquisition of Air India, citing potential limitations on the competition for India-Singapore air routes. Consequently, it sought commitments from the Tata Group to mitigate these concerns. Last September, the Competition Commission of India (CCI) approved Vistara's merger with Air India following similar commitments from both airlines to maintain existing capacity on specific routes. The airlines are also pursuing approvals from regulators in other countries where they operate.

The Tata group anticipates receiving regulatory clearances, including those from the National Company Law Tribunal, Ministry of Civil Aviation, and Department for Promotion of Industry and Internal Trade, by mid-2024. Subsequently, they will commence commercial integration, including network synergies.

Vinod Kannan, CEO of Vistara, previously indicated that the Tata Group aims to finalise the merger by 2025. He acknowledged that a complete merger of operations would require time due to the complexities involved in merging networks and operations.

On 5th March 2024, in a significant development, the Competition and Consumer Commission of Singapore (CCCS) announced its approval for the merger between Air India and Vistara, marking a pivotal milestone in creating India's second-largest airline. Air India and Vistara have committed to maintaining the capacity levels as of 2019 on routes connecting Singapore to Delhi, Mumbai, Chennai, and Trichy, as per the directives of the CCCS. This move further solidifies the consolidation efforts within the Tata Group's airline business. In collaboration with Singapore Airlines (SIA), Tata Sons will merge Vistara with Air India, aiming to establish India's second-largest carrier. SIA will hold a 25.1% stake in the entity, injecting an equity infusion of Rs 205.85 billion, while Tata will retain the remainder. The merger forms part of Tata Sons' strategy to streamline its conglomerate's businesses and enhance operational efficiency. In a statement, the CCCS expressed satisfaction with the proposed commitments, considering them adequate to address competition concerns arising from the merger, and subsequently granted its approval. Earlier, the CCCS had conducted a market testing exercise to evaluate the proposed commitments' sufficiency in addressing competition concerns. While most stakeholders did not raise objections, one did express concerns. In a preliminary review, the CCCS had voiced apprehensions regarding Tata Group's acquisition of Air India, citing potential limitations on the competition for India-Singapore air routes. Consequently, it sought commitments from the Tata Group to mitigate these concerns. Last September, the Competition Commission of India (CCI) approved Vistara's merger with Air India following similar commitments from both airlines to maintain existing capacity on specific routes. The airlines are also pursuing approvals from regulators in other countries where they operate. The Tata group anticipates receiving regulatory clearances, including those from the National Company Law Tribunal, Ministry of Civil Aviation, and Department for Promotion of Industry and Internal Trade, by mid-2024. Subsequently, they will commence commercial integration, including network synergies. Vinod Kannan, CEO of Vistara, previously indicated that the Tata Group aims to finalise the merger by 2025. He acknowledged that a complete merger of operations would require time due to the complexities involved in merging networks and operations.

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