Singapore Airlines (SIA) & Tata Sons made The announcement that they had agreed to combine Air India and Vistara, with SIA receiving a 25.1% ownership in the new firm in exchange for a Rs 2,058.5 crore ($250 million) investment in Air India.
Singapore Airlines (SIA) & Tata Sons
This 25.1% interest will be in an expanded Air India group, which will include Air India, Vistara, AirAsia India, and Air India Express, and the merger of all airlines is expected to be completed by March 2024, subject to regulatory clearances.
Air India Express & AirAsia India are already being merged into a single business that will offer low-cost flying alternatives.
"SIA aims to fund this expenditure entirely with internal cash resources, which totaled S$17.5 billion as of September 30, 2022."
SIA and Tata have also committed to engage in additional financial infusions, if necessary, to finance the expanded Air India's expansion and operations in FY2022/23 and FY2023/24.
Based on SIA's post-completion 25.1% shareholding, its share of any additional capital investment could be amount of Rs 5,020 crore ($615 million), paid only after the merger is completed," SIA said in a statement published Tuesday.
The real sum will be determined by circumstances such as the development of the larger Air India's business strategy & its access to alternative financial sources.
SIA expects to support any new capital investments entirely using internal financial resources, according to the company.
The Indian Express reported on September 21 that the merger is being considered, with the goal of completing it by 2024.
Vistara Flight: "Through this deal, SIA will strengthen its cooperation with Tata and get an immediate strategic position in an organization four to 5 times the size of Vistara."
"The combination would boost SIA's footprint in India, strengthen our multi-hub strategy, & allow it to continue directly competing in a huge and rapidly rising aviation market," the airline noted.
"Tata Sons is one of India's most well-known and recognized brands." Our work in establishing Vistara in 2013 resulted in a market-leading full-service carrier that has received several worldwide plaudits in a short period of time.
Through this combination, we will be able to strengthen our partnership with Tata and actively engage in an amazing new growth phase in India's aviation business.
We will collaborate to help Air India's reform initiative, unleash its immense potential, and return it to its position as a worldwide leader."
Singapore Airlines Chief Executive Officer Goh Choon Phong was mentioned in the statement.
"The combination of Vistara with Air India is just a significant step forward in our ambition to become Air India a genuinely global airline."
We are reinventing Air India in order to provide an exceptional customer experience every time, for each and every customer.
Air India is working on expanding its network and fleet, overhauling its customer proposition, and improving safety, dependability, and on-time performance as part of its transformation. We are delighted about the prospect of building a robust Air India that will provide both full-service & low-cost flights on local and international routes.
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