India’s oldest and largest conglomerate, Tata Sons, will merge Air India with Vistara, a carrier it jointly manages with Singapore Airlines, in a major step towards overhauling the country’s indebted flag carrier.
NEW DELHI — India’s oldest and largest conglomerate, Tata Sons, will merge Air India with Vistara, which it jointly manages with Singapore Airlines, in a major step towards overhauling the country’s indebted flag carrier.
The merger will strengthen Singapore Airlines’ presence in the growing Indian aviation market, the company said in a statement. It is also expected to strengthen the Tata Group’s competitive position in the market against the country’s dominant carrier, IndiGo.
Singapore Airlines is investing $250 million in Air India as part of the deal, giving it a 25.1% stake in the group, with the rest held by the Tata Group. The two companies aim to complete the merger by March 2024, subject to regulatory approvals, Singapore Airlines said in its statement.
“We will work together to support Air India’s transformation agenda, unlock its significant potential and restore it to its position as a leading airline on the global stage,” Singapore Airlines CEO Goh Choon Phong said in the statement.
Air India is India’s largest international carrier and the second largest national carrier. The merger is an “important step” in its restructuring after Tata Sons took over in January, said Tata Chairman Natarajan Chandrasekaran.
By taking over Air India, Tata absorbed about a quarter of its debt load of more than $8.2 billion.
Between them, Air India and Vistara have 218 aircraft serving 38 international routes and 52 domestic routes. The merger will make Air India the only carrier in the country to offer both full-service and low-cost passenger services.
IndiGo, a low-cost carrier founded in 2006, is India’s largest passenger airline with a market share of 56.7% in October.
Tata pioneered commercial aviation in India when it launched the airline in 1932, before it was taken over by the government in 1953. Besides Air India and Vistara, the Tata Group operates an airline in low fares, Air Asia India, in cooperation with Air Asia of Malaysia. Berhad.
The Indian conglomerate is a sprawling collection of nearly 100 companies that includes the country’s largest automaker, its biggest private steel company and a leading outsourcing firm. The companies employ more than 350,000 people worldwide.