Vistara merger into Air India by March 2024 |
Tata Sons and Singapore Airlines on November 29 announced that they will merge Vistara into Air India, with a target to complete the process by March 2024 subject to regulatory approvals. Once that happens, Tata Sons will hold a 74.9% stake in the AI-Vistara-AI Express-AirAsia India Pvt Ltd (AAIPL) combined entity and SIA the remaining 25.1% stake. SIA will invest $250 million as soon as this integration is complete, valuing the new Air India at about $1 billion. SIA said it intends to fully fund this investment with its internal cash resources, which stood at 17.5 billion Singapore dollars as of September 30, 2022.
SIA and Tata have also agreed to participate in additional capital injection to fund the growth and operations of the enlarged Air India in FY 2022-23 and FY 2023-24. Based on SIA`s 25.1% stake post-completion, its share of any additional capital injection could be up to US$615 million, payable only after the completion of the merger. Tata Sons chairman N Chandrasekaran said: “The merger of Vistara and Air India is an important milestone in our journey to make Air India a truly world-class airline. We are transforming Air India, with the aim of providing great customer experience, every time, for every customer."
Chandrasekaran further noted that as part of the transformation, Air India is focusing on growing both its network and fleet, revamping its customer proposition, and enhancing safety, reliability, and on-time performance. Air India and Vistara have a total of 218 wide-bodies and narrowbody 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.
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