Singapore Airlines on Tuesday said that Vistara will be merged with Tata Group’s Air India by March 2024, subject to regulatory approvals.
Tata Group owns a 51% stake in Vistara and Singapore Airlines has the remaining 49%.
After the merger, Air India will have combined fleet of 218 aircraft, making it India’s largest international carrier and second-largest domestic carrier.
Singapore Airlines will also invest Rs 2,058.5 crore in Air India as part of the transaction. “Post the consolidation, SIA shall hold 25.1% in Air India,” Tata Sons, the holding company that controls the Tata Group, said in a statement.
Singapore Airlines’ stake will be a part of a large group of merged airlines that now includes Air India, Vistara, AirAsia India and Air India Express.
Singapore Airlines said that it plans to fund the promised investment through internal cash resources, which stood at $17.5 billion (Rs 1.42 lakh crore) as of September 30, 2022, The Indian Express reported.
“SIA and Tata have also agreed to participate in additional capital injections, if required, to fund the growth and operations of the enlarged Air India in FY2022/23 and FY2023/24,” Singapore Airlines said. “Based on SIA’s 25.1% stake post-completion, its share of any additional capital injection could be up to Rs 5,020 crore [$615 million], payable only after the completion of the merger.”