‘Air India-Vistara merger awaits regulatory approvals’

In September 2023, the deal received approval from the Competition Commission of India

‘Air India-Vistara merger awaits regulatory approvals’

Crew members and officials pose next to India’s first Airbus A350 of Air India at the Begumpet Airport in Hyderabad. (Photo by NOAH SEELAM/AFP via Getty Images)

By: Pramod Thomas

SINGAPORE AIRLINES group has said that the proposed Air India and Vistara merger, which is awaiting foreign direct investment and other approvals, will strengthen its multi-hub strategy.

It added that the merger will allow it to continue directly participating in the fast-growing Indian aviation market.

The group posted a 24 per cent rise in net profit at £1,570 million for FY 2023-24, helped by robust air travel demand.

In a release, the group said it has reported the highest full-year operating and net profits in its history as robust demand for air travel drives record passenger revenue and load factors.

About Air India-Vistara merger, the group said foreign direct investment and other regulatory approvals are still pending.

Vistara is a joint venture between Singapore Airlines and Tatas, which also owns Air India.

“Once completed, it will give SIA a 25.1 per cent stake in an enlarged Air India group with a significant presence in all key Indian airline market segments, including domestic, international, full-service, and low-cost,” a statement said.

“This will strengthen SIA’s multi-hub strategy, and allow the group to continue participating directly in this large and fast-growing aviation market.”

The merger, announced in November 2022, was approved by the Competition and Consumer Commission of Singapore in March. In September 2023, the deal received approval from the Competition Commission of India, subject to certain conditions.

On the outlook, the group said the demand for air travel remains healthy in the first quarter of FY2024/25, supported by a strong pick up in forward bookings to north Asia and south east Asia.

Passenger yields will likely continue to moderate due to increased capacity injection by airlines, especially in the Asia-Pacific region, it noted.

However, it also mentioned that the airline industry continues to face challenges including rising geopolitical tensions, an uncertain macroeconomic climate, supply chain constraints, and high inflation in many parts of the world.