Singapore Airlines to Invest INR 3,194.5 Crore in Tata's Merged Air India and Vistara Entity SIA will contribute its 49 per cent stake in Vistara, as well as INR 2,058.5 crore in cash, to secure a 25.1 per cent equity share in the merged airline.
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Singapore Airlines (SIA) Group announced an investment of INR 3,194.5 crore into the newly merged entity that brings together Air India and Vistara. This move, disclosed alongside SIA's financial results, will grant the airline a 25.1 per cent stake in the expanded Air India. The merger represents a strategic collaboration between Tata Sons and Singapore Airlines, building on a partnership that began with Vistara in 2015. Originally launched as a joint venture between Tata Sons and SIA, Vistara has operated under Tata SIA Airlines Limited, aiming to deliver premium services in the Indian aviation market.
SIA's investment in the merged entity will be completed by the end of November 2024 through a subscription of new shares in Air India, the group announced. Future capital injections are also under consideration, contingent on Air India's financial requirements and funding availability, according to SIA. Through this arrangement, SIA will contribute its 49 per cent stake in Vistara, as well as INR 2,058.5 crore in cash, to secure a 25.1 per cent equity share in the merged airline.
This transaction is expected to generate a notable accounting gain of approximately S$1.1 billion for SIA, as the group leverages the opportunity to expand its market presence in the growing Indian aviation sector. The merger itself was initially announced in November 2022, with the aim of consolidating Tata's aviation assets under one comprehensive network. The agreement includes SIA's commitment to co-finance previous investments made by Tata in Air India before the merger's completion, along with costs associated with maintaining its 25.1 per cent stake, up to a ceiling of INR 5,020 crore.
SIA's latest statement highlighted that the integration of Air India and Vistara will allow the newly formed entity to strengthen its footprint across multiple market segments, including domestic, international, full-service, and budget airlines. This expansion aims to elevate Air India's competitiveness both within India and internationally.
In addition to the merger, Air India and Vistara plan to expand their existing codeshare arrangement. This enhancement will add 11 domestic Indian cities and 40 international destinations to their combined network, marking the first major expansion of this agreement since it was first launched in 2010. The expanded network will offer customers increased flexibility in travel options across Asia and beyond, reflecting the growing strategic alignment between SIA and Tata in the evolving Indian aviation market.
