India’s oldest and largest conglomerate, Tata Sons Pvt Ltd, is to merge its Air India Ltd with Vistara, which it runs jointly with Singapore Airlines Ltd, in a major step toward revamping the country’s debt-laden national carrier.
The merger would strengthen Singapore Airlines’ foothold in India’s fast-growing aviation market, the company said in a statement.
It is also expected to bolster the Tata Group’s competitive position in the market against the country’s dominant carrier, IndiGo.
Photo: Reuters
Singapore Airlines is investing US$250 million in Air India as part of the deal, giving it a 25.1 percent stake in the group, with the rest owned by the Tata Group.
Both 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 program, unlock its significant potential, and restore it to its position as a leading airline on the global stage,” Singapore Airlines chief executive officer Goh Choon Phong (吳俊鵬) said in the statement.
Air India is India’s largest international carrier and second-largest domestic carrier.
The merger is an “important milestone” in its restructuring after Tata Sons regained ownership of it in January, Tata Group chairman Natarajan Chandrasekaran said.
In taking over Air India, Tata absorbed about one-quarter of its more than US$8.2 billion debt burden.
Between them, Air India and Vistara have 218 aircraft serving 38 international and 52 domestic routes. The merger would make Air India the only carrier in the country with full-service and low-cost passenger services.
IndiGo, a low-cost carrier founded in 2006, was as of October India’s largest passenger airline with a market share of 56.7 percent.
Tata pioneered commercial aviation in India when it launched the airline in 1932, before it was taken over by the government in 1953. In addition to Air India and Vistara, the Tata Group runs a budget airline, Air Asia India in cooperation with Malaysia’s Air Asia Bhd.
The Indian conglomerate is a sprawling collection of nearly 100 companies that includes the country’s largest automaker, its largest private steel company and a leading outsourcing firm.
The companies employ more than 350,000 people around the world.
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