Singapore Airlines Could Be Offered A Stake In Air India-Vistara Merger

The Tata Group could reportedly offer Singapore Airlines (SIA) a stake while merging Air India with Vistara. SIA owns a little less than half of the full-service carrier Vistara and, as such, will have a say in any plans involving the merger.

Stake in Air India-Vistara merger

As part of the negotiations for the Air India-Vistara merger, Singapore Airlines could be offered a stake by the Tata Group. According to a report by The Economic Times, top executives in the know have said that SIA has agreed “in principle” for Vistara to join forces with Air India, and finer details are being discussed.

SIA could be offered a stake in Air India-Vistara merger. Photo: Vistara

SIA partnered with the Tata Group and owns 49% of Vistara to tap the growing domestic market in India. However, with the Tatas also acquiring Air India and the subsequent plans of a merger to consolidate the business, SIA has had to look at the enterprise in a new light to see how the changes affect its original plan.

Discussions on

Earlier this year, Singapore Airlines had asked the Tatas to wait for some time before taking any decisions about the merger. Both the Tatas and SIA have discussed such possibilities, and SIA had reportedly even agreed to join the Tata bid for Air India but, because of the pandemic, decided to back out.

SIA is said to be warming up to the idea of an AI-Vistara merger. Photo: Getty Images

Now, the ET report reveals that SIA is warming up to the idea but is unlikely to commit any significant funds to Air India yet. SIA has not said anything on the matter, stating that they “do not comment on any confidential discussions that we may or may not be having with our partners.”

In June, it was reported that the Competition and Consumer Commission of Singapore (CCCS) was also reviewing the deal to see if it violates the nation’s Competition Act. Clearly, all angles will be examined before any decision on the merger is finalized.

Bringing them together

Following the acquisition of Air India and Air India Express, the Tatas found themselves in possession of four airlines – the other two being Vistara and AirAsia India. Tata Sons Chairman Chandrasekaran is keen on bringing the carriers together to improve efficiency and margins and get a bigger share of the Indian market.

Recent reports suggest that the consolidation process will likely start with the merger of AirAsia India into Air India Express and will be completed over the next 12 months.

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The Tatas are keen on consolidating their airline business. Photo: Akshay Mantri

After this, the group will shift its focus towards merging Vistara with Air India, with the likelihood of Singapore Airlines eventually partnering with the Tata Group to become part-owners of Air India as well.

Sources have told The Indian Express that the merger of Air India Express and AirAsia India will start with integrating information technology and passenger booking systems. The Air India Express system is likely to be moved to AirAsia India’s system, which is said to be better in all aspects. Issues like cabin crew dress and branding are still being discussed at various levels.

With time, we will likely get more details about the Tata Group’s plans, but it clearly looks like they have their hands full for the entire year.

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Source: The Economic Times, The Indian Express