Singapore Airlines confirms merger talks with Vistara-Air India


New Delhi: In a preliminary acknowledgment of a possible integration of the two airlines, Singapore Airlines (SIA), the flagship carrier of the Republic of Singapore, informed the Southeast Asian country’s stock exchange on Thursday that it is in private negotiations with Tata Sons to merge Vistara with Air India.

“In line with its multi-hub strategy, SIA is currently in confidential discussions with the Tatas to explore a possible transaction in relation to the shares of Vistara and Air India. The discussions are intended to deepen the existing partnership between SIA and the Tatas and may include a possible integration of Vistara and Air India,” SIA said in a filing to the Singapore bourse.

One of the four airlines operated by the Tata Group is SIA, which has a 49% stake in Vistara. Others include AirAsia India, Air India and Air India Express.

The merger of AirAsia India and Air India was approved by the Competition Commission of India in June. The combination would also need the approval of the National Company Law Tribunal. Executives from both airlines are currently debating how to optimize various factors related to the integration, such as products and services.

Similar to this, Tatas and SIA have initiated a process of due diligence and valuation as they look into the possible merger of Vistara and Air India.

After the end of the financial year, a decision will be made on the percentage of the merged company that each party will own.

In 2021-22, Vistara lost Rs 2,031 crore while earning Rs 5,226 crore in sales. Despite earning a revenue of Rs 19,815 crore, Air India posted a loss of Rs 9,556 crore.

The Tatas are looking to make Air India the flagship airline of their airline, while SIA sees India as a key market for its multi-hub plan. In a five-year transformation plan unveiled last month, the group is also targeting a 30% market share for Air India in the domestic market.

As of August, Air India had a market share of 8.4%. The plan itself suggested that all the airlines in the group would be combined. Vistara and AirAsia India had a market share of 10.4% and 4.6% respectively.

However, SIA has informed its investors that the merger is not guaranteed.

“Discussions are ongoing and no definitive terms have been agreed upon between the two parties. There can be no certainty or assurance that any definitive agreement will be entered into or that a potential transaction will materialize or be completed as a result of these discussions,” he said. to say.

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