The Competition Commission of India (CCI) has approved the merger deal of Tata Group Airlines Vistara and Air India on 1 September 2023. However, the deal has certain specifications and conditions. If the conditions are met, then Air India can possibly become India’s largest international carrier and second-largest domestic airline after IndiGo.
“CCI approves the merger of Tata SIA Airlines into Air India, and acquisition of certain shareholding by Singapore Airlines (SIA) in Air India subject to compliance of voluntary commitments offered by the parties,” wrote the anti-trust agency on X, formerly Twitter. It also mentioned that the details of the merger deal will be announced soon.
The approval comes after months when CCI in June 2023 released a show cause notice to Air India. It clarified why its planned merger with Vistara should not be considered a concern amid rising competition in the aviation industry.
The move is a huge step forward for Tata Group in bringing together its aviation business. For the unversed, Vistara and Air India, two full-service airlines, are part of the Tata Group. You would be surprised to know that Singapore Airlines (SIA) holds a 49 percent stake in Vistara.
Considering the deal, SIA has to invest around Rs 2,059 crore in the increased share capital of Air India for a 25.1% stake. Tata Sons would have ownership of the rest 74.9% stake in the integrated firm. Tata Sons and SIA registered a merger application with the CCI in April 2023 stating that the proposed merger deal of Vistara with Air India would not change the competitive landscape or lead to any damaging effect on competition in India. They shared that they hope to close the merger deal by March 2024.
Through this deal, SIA will strengthen its collaboration with Tata and quickly gain a strategic stake in an entity that is four to five times bigger in scale compared to Vistara.
The merger is expected to strengthen SIA’s presence in India, support its multi-hub strategy, and allow it to restart partaking instantly in a large and fast-growing aviation market.
Meanwhile, aviation research and advisory firm CAPA India had before said the merger would “redraw market and consumer power in the international arena to Indian carriers”, which has historically been conquered by foreign players.
After the merger deal, CAPA India says, it hopes to see the emergence of Air India as a global network carrier in terms of size, scale, and quality “in the next six years”. The airline could enjoy a market share of “50 percent in international traffic”, it had stated.
It is interesting to see how Indian companies are joining hands together to dominate the industry that has always been ruled by foreign players even after the independence movement. No wonder the brains behind any innovation in technology have always come from a foreign land but the efforts to execute the ideas have always been using Indian blood and soil. So, why not cherish the fact that Indians and the companies led by our own people can actually give a tough deal to non-Indians in the coming future!?