Singapore Airlines gets FDI nod from Indian government for Vistara-Air India merger

Singapore Airlines on Friday said it has received approval from the Indian government for the foreign direct investment as part of the proposed merger of Vistara with Air India, a deal that will create one of the world's largest airline groups. With the clearance in place, the merger that will see Singapore Airlines acquiring a 25.1 per cent stake in Air India, is expected to be completed by the end of this year. The proposed merger was announced in November 2022. Air India is owned by Tata Group and Vistara is a 51:49 joint venture between Tatas and Singapore Airlines.

In a regulatory filing on Friday, Singapore Airlines (SIA) said it has received approval from the Government of India for Foreign Direct Investment (FDI) into the enlarged Air India as part of the proposed merger.

"The FDI approval, together with anti-trust and merger control clearances and approvals, as well as other governmental and regulatory approvals received to-date, represent a significant development towards the completion of the proposed merger," the airline said in the filing to the Singapore Stock Exchange. The airline also said the completion of the merger continues to be subject to compliance by the parties with applicable Indian laws, which is currently expected to be completed in the next few months. "At this juncture, completion of the proposed merger is anticipated to occur by the end of 2024," it added.

According to Singapore Airlines, the parties are in discussions to extend the long stop date for the completion of the merger. Earlier, it was expected to be October 31, 2024. The merger, which will create one of the biggest airline groups, was approved by the National Company Law Tribunal (NCLT) in June.

In March, Singapore's competition regulator CCCS gave a conditional nod for the proposed deal. Prior to that in September 2023, the deal received approval from the Competition Commission of India (CCI), subject to certain conditions. "SIA will make the necessary announcement(s) upon completion of the proposed merger or in the event that there are other significant developments," the filing said on Friday.

Vistara to operate last flight under its brand on Nov 11

Vistara will operate the last flight under its brand on November 11 and the full service carrier's operations will be unified with Air India from November 12, 2024. The government has given its nod for the foreign direct investment by Singapore Airlines as part of the Air India-Vistara merger.

Vistara is a joint venture between Tata Group and Singapore Airlines. Air India is owned by the Tata Group. "Starting 03 September 2024, customers will, progressively, no longer be able to make bookings with Vistara for travel on or after 12 November 2024," Vistara said in a release on Friday.

Thereafter, Vistara aircraft will be operated by Air India and bookings for the routes operated by these planes will be redirected to Air India's website. "Vistara will continue to take bookings and operate flights as usual till 11 November 2024," the release said.

The proposed merger of Vistara with Air India was announced in November 2022. In a separate release, Air India welcomed the Union Cabinet's approval for the foreign direct investment by Singapore Airlines in the airline. "This is an important milestone that facilitates the merger process between Vistara and Air India, and the broader transformation of the Air India Group," it said.