Singapore Airlines (SIA) will make an additional investment of Rs 3,194.5 crore in Tata Group-owned Air India after Vistara’s merger, scheduled for completion on November 11, 2024. Announced on November 29, 2022, this merger signifies a major consolidation in India’s rapidly expanding aviation sector and will give Singapore Airlines a 25.1% stake in the expanded Air India.
Launched on January 9, 2015, Vistara is a full-service airline jointly owned by Tata and Singapore Airlines, with SIA holding a 49% share. As part of the merger, SIA’s consideration includes its 49% Vistara stake and Rs 2,058.5 crore in cash, in exchange for a 25.1% equity interest in the larger Air India. Following the merger, SIA anticipates a non-cash accounting gain of approximately 1.1 billion Singapore dollars and will begin equity accounting for its share of Air India’s financial results.
SIA’s additional investment, amounting to Rs 31,945 million (SGD 498 million), aligns with Tata’s previous funding to Air India, allowing SIA to retain its 25.1% stake. The funding, through the subscription of new Air India shares, will be completed by November 2024, with future capital injections evaluated based on Air India’s financial needs and available funding options.
The merged airline will hold a robust position across India’s key aviation segments, covering domestic and international routes, as well as full-service and low-cost operations. This merger supports SIA’s multi-hub strategy, enhancing its role in India’s fast-growing aviation market. Recently, Air India and SIA also expanded their codeshare agreement, adding 11 Indian cities and 40 international destinations to their network, further strengthening their joint operations.
