India has approved a $276 million investment by Singapore Airlines Ltd. into the newly merged Air India and Vistara, clearing the final hurdle for the deal. This approval paves the way for the operational merger of aircraft, staff, and routes. Air India anticipates completing the merger with Vistara by the end of the year, according to a filing by Singapore Airlines on Friday. The Singaporean carrier, which co-owns Vistara with Tata Group, will hold a 25.1% stake in the expanded Air India Group.
The Air India-Vistara merger, which has been in the works for over 18 months, is part of a broader trend of consolidation in the airline industry. Recent deals include Air France-KLM acquiring a 19.9% stake in SAS AB and Deutsche Lufthansa AG’s €325 million ($360 million) investment in Italy’s ITA Airways. Other ongoing airline transactions include the $1.9 billion merger between Alaska Air Group Inc. and Hawaiian Holding Inc., and Korean Air’s $1.4 billion bid for Asiana Airlines Inc. However, not all proposed deals have succeeded; US carriers JetBlue and Spirit abandoned a $3.8 billion agreement, and IAG SA terminated its bid to acquire Spain’s Air Europa.
The Indian merger will provide Singapore Airlines with greater exposure to one of the world’s fastest-growing travel markets, making it the only foreign airline to hold a significant stake in an Indian carrier. Additionally, the deal expands Singapore Airlines’ reach beyond its smaller domestic market, which has been impacted by its reliance on international travel during the Covid-19 pandemic. The carrier has recently completed several joint-venture deals, including partnerships with Malaysia Airlines and Garuda Indonesia, and is pursuing a similar agreement with Japan’s All Nippon Airways.
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