Singapore Airlines (SIA) and Tata Sons (Tata) have agreed to merge Air India and  Vistara, with SIA also investing INR 20,585 million (SD360 million, USD250 million)  in Air India as part of the transaction. This would give SIA a 25.1% stake in an  enlarged Air India group with a significant presence in all key market segments¹.  SIA and Tata aim to complete the merger by March 2024, subject to regulatory  approvals.  

SIA intends to fully fund this investment with its internal cash resources, which  stood at SD17.5 billion as of 30 September 2022. SIA and Tata have also agreed to participate in additional capital injections, if  required, to fund the growth and operations of the enlarged Air India in FY2022/23  and FY2023/24. Based on SIA’s 25.1% stake post-completion, its share of any  additional capital injection could be up to INR 50,200 million (SD880 million,  USD615 million), payable only after the completion of the merger.  

The actual amount will depend on factors including the progress of the enlarged  Air India’s business plan, and its access to other funding options. SIA intends to  fully fund any additional capital injections with its internal cash resources.  Goh Choon Phong, chief executive officer, Singapore Airlines, said: “Tata Sons  is one of the most established and respected names in India. Our collaboration to  set up Vistara in 2013 resulted in a market-leading full-service carrier, which has  won many global accolades in a short time.  

“With this merger, we have an opportunity to deepen our relationship with Tata  and participate directly in an exciting new growth phase in India’s aviation market.  We will work together to support Air India’s transformation programme, unlock its  significant potential, and restore it to its position as a leading airline on the global  stage.”  

Natarajan Chandrasekaran, chairman, Tata Sons, said: “The merger of Vistara  and Air India is an important milestone in our journey to make Air India a truly  world-class airline. We are transforming Air India, with the aim of providing great  customer experience, every time, for every customer. As part of the transformation,  Air India is focusing on growing both its network and fleet, revamping its customer  proposition, enhancing safety, reliability, and on-time performance.  

“We are excited with the opportunity of creating a strong Air India which would  offer both full-service and low-cost services across domestic and international  routes. We would like to thank Singapore Airlines for their continued partnership.”