Singapore Airlines Affirms Progress in Air India-Vistara Merger, Awaits Regulatory Approvals

Newseense February 21, 2024

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Singapore Airlines Affirms Progress in Air India-Vistara Merger, Awaits Regulatory Approvals

Singapore Airlines has confirmed the ongoing progress of the proposed merger between Air India and Vistara, a joint venture between Singapore Airlines and Tata Group. The merger, announced in November 2022, is awaiting foreign direct investment and other regulatory approvals. Once finalized, Singapore Airlines will acquire a 25.1% stake in the enlarged Air India Group, marking a significant presence in all key segments of the Indian airline market.

In its recent announcement alongside the December quarter results, Singapore Airlines emphasized the strategic benefits of the merger. The collaboration aims to strengthen Singapore Airlines’ footprint in India, enhance its multi-hub strategy, and enable continued participation in the rapidly expanding aviation market in the country.

“The proposed merger of Air India and Vistara is in progress, pending foreign direct investment and other regulatory approvals. When completed, it will give SIA (Singapore Airlines) a 25.1 per cent stake in an enlarged Air India Group with a significant presence in all key Indian airline market segments,” the release stated.

Vistara’s CEO, Vinod Kannan, previously stated that the merger is expected to be finalized by mid-2025, with legal approvals anticipated by the middle of this year.

Despite reporting an operating profit of SGD 609 million for the three months ending December 2023, reflecting a 19.3% decline compared to the previous year, Singapore Airlines Group’s net profit rose by 4.9% to SGD 659 million. Contributing factors include a lower tax expense, profits from associated companies, and gains from the disposal of aircraft and related assets.

In the same period, the group achieved a record revenue of SGD 5,082 million, surpassing the USD 5,000 million mark for the first time in its history.

Singapore Airlines acknowledged the persistent demand for air travel in the final quarter of FY2023/24 and the first quarter of FY2024/25. However, the release also highlighted challenges such as increased competition affecting passenger yields, geopolitical tensions impacting business sentiment, and potential economic uncertainties. The airline industry is further grappling with high fuel prices, inflationary pressures, and global supply chain constraints, presenting a more challenging operating cost environment for airlines worldwide.

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