Vistara-Air India Merger: The Competition Commission of India has approved the merger of both Tata Group’s airlines Vistara and Air India on September 1.
Air India-Vistara Airlines Merger: Competition Commission of India (CCI) on Friday, September 1, has approved the merger of Tata Group’s airlines Vistara and Air India under certain conditions. After this approval, Oil India can become the largest international flying airline in the country, while it will be the second largest airline in terms of domestic flights. Indigo is at number one.
The notification said that CCI has approved the merger of Tata SIA Airlines with Air India and acquisition of certain shareholding in Air India by Singapore Airlines (SIA). Under this proposal, Tata SIA Airlines Limited (TSAL/Vistara) will be merged into Air India Limited.
It has been said on behalf of Tata Group that the detailed information of the merger will be given later. Significantly, before this approval, CCI had issued a show cause notice to Air India in June. The notice sought clarification as to why its proposed merger with Vistara should not be probed for competition.
This step of Tata Group is a big step towards strengthening the aviation business. Vistara and Air India are both airlines of the Tata Group. Singapore Airlines (SIA) has a 49 per cent stake in Vistara. Before the merger, SIA will invest Rs 2,059 crore in Air India for a 25.1 per cent stake. After this, Tata Sons will hold 74.9 percent stake in the airline.
It may be noted that Tata Sons and SIA had filed a merger application with the CCI in April this year, stating that the proposed merger of Vistara with Air India would have no impact on competition. The merger deal is expected to be sealed by March 2024.
CAPA India says that Air India will grow in size in the next six years after the merger. Along with this, a big improvement is also expected in the quality and global network. In the coming days, Tata’s airlines can get 50 percent stake at the global level.
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