New Delhi, (IANS) Singapore Airlines (SIA) and Tata Sons have agreed to merge Air India and Vistara, with SIA investing Rs 2,058.5 crore in Air India as part of the transaction. This would give SIA a 25.1 per cent stake in an enlarged Air India group with a significant presence in all key market segments .

SIA and Tata aim to complete the merger by March 2024, subject to regulatory approvals.

Following the transaction that was announced on Tuesday, Singapore Airlines Limited (SIA) will immediately acquire a strategic stake in an entity that is four to five times larger in scale compared to Vistara.

As far as market share of airlines is concerned, Indigo, the leading airline, has 56.7 per cent domestic market share while Vistara and Air India has a market share of 9.2 per cent and 9.1 per cent in the month of October.

Spicejet has a market share of 7.3 per cent and GoFirst has a market share of 7 per cent, as per the regulator's October data.

Air India (including Air India Express and AirAsia India) and Vistara have a total of 218 aircraft, serving 38 international and 52 domestic destinations.

With the integration, Air India will be the only Indian airline group to operate both full-service and low-cost passenger services. It can optimise its route network and resource utilisation, be flexible and agile in capturing demand across market segments, and tap on a larger consumer base to strengthen its loyalty programme.

This would reinforce its position as India's largest international carrier and second largest domestic carrier, allow it to offer more options and connectivity for business and leisure customers, and enable it to compete as a leading global airline.

Indigo, the leading carrier has a fleet strength of 279 aircraft and Spicejet has the fleet strength of 91 aircraft.

The merger would bolster SIA's presence in India, strengthen its multi-hub strategy, and allow it to continue participating directly in a large and fast-growing aviation market.

As per SIA, the combination of Air India and Vistara would bring significant synergies.

Air India has valuable slots and air traffic rights at domestic and international airports that are not available to Vistara.

With Vistara widely recognised as India's leading full-service carrier, Air India will benefit from its operational capabilities, customer base, and a strong focus on customer service and product excellence.

"Air India is delighted at the prospect of integrating with Vistara, which has achieved much over the last 8 years. The skills, people, systems and processes that have driven Vistara's success will complement, strengthen and accelerate Air India's Vihaan.AI transformation programme, and enable the new Air India to more quickly attain the size, reach and quality befitting of a world class airline proudly representing India around the globe," said Campbell Wilson, CEO & MD Air India.

News BY IANS (Indo-Asian News Service)

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