Singapore Airlines gets India's FDI approval for Air India-Vistara merger

New Delhi: Tata-run 'Vistara' will merge with Air India and operate under the latter's brand name from November 12, as the union government has cleared the Singapore Airline's Rs 2,058.5 crore Foreign Direct Investment (FDI) proposal in Air India Group.

From September 3, Vistara said it will not be possible to book with the airline for travel on or after November 12.

A statement said Vistara aircraft will be operated by Air India and bookings for the routes operated by these planes will be redirected to Air India's website. Vistara will continue to take bookings and operate flights as usual till November 11, it added.

All customers already booked on Vistara flights after November 12 will automatically have their reservations converted to Air India flights, it said.

Vistara is a joint venture between Tata Group and Singapore Airlines while Air India, India's national carrier, was bought by the Tatas. Vistara will stop operating under the brand name on November 11 and all Vistara aircraft and crew will move to Air India.

Post merger, the SIA will have a 25.1% stake in Air India. In Vistara, SIA had 49% stake while the rest 51% was held by the Tatas. Together, Air India and Vistara have 23,000 employees.

Singapore Airlines (SIA) said on Friday that the union government has approved its proposed FDI into the enlarged Air India Group as part of the ongoing merger of Air India and Vistara. The approval marks a significant development towards the completion of the merger, which is expected to be completed by the end of this year, SIA said in a statement.

Air India CEO and Managing Director Campbell Wilson told employees that they were now embarking on the final stretch of the long and complicated merger process, which was announced in November 2022. A set of Frequently Asked Questions (FAQs) has also been prepared for passengers to help them with more information amid the merger process, he said.

The merger will create one of the biggest airline groups. It was approved by the National Company Law Tribunal (NCLT) in June, months after Singapore's competition regulator CCCS gave a conditional nod for the proposed deal. In September last year, the deal received approval from the Competition Commission of India, subject to certain conditions.

"SIA and Tata Sons are firmly committed to supporting the growth and success of the Air India Group, which post-merger will have a significant presence in all key Indian airline market segments (full service, low-cost, international, and domestic). This merger will reinforce SIA's multi-hub strategy, and underscore its long-standing commitment to India through a direct stake in this large and rapidly growing aviation market," SIA said.

Currently, the Tatas-owned Air India Group comprises Air India, Air India Express, AIX Connect (formerly AirAsia India) and Vistara. As part of consolidation of Tata Group's airline business, AIX Connect is in the process of merging with Air India Express.