Singapore Airlines Ltd. on Friday said it has received approval from Indian government for foreign direct investment as part of the proposed merger of Tata Group-owned Air India and joint venture Vistara. The airline now expects the merger to complete by the end of this year.
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, Singapore's flagship carrier said in a regulatory filing.
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SIA and the Tata Group are in discussions to extend the merger deadline from Oct. 31, 2024, to accommodate the latest expected deal completion date.
The merger, which will create one of the biggest airline groups, was announced in November 2022. Once the deal is complete, Singapore Airlines will have a 25.1% stake in Air India. Tata Sons Pvt. will hold 73.8% equity and SBICAP Trustee Co. will own 1.52%.
In March, Singapore's Competition and Consumer Commission of Singapore gave a conditional nod for the proposed deal, while in June, the National Company Law Tribunal cleared the merger.
Earlier in September 2023, the deal received approval from the Competition Commission of India, subject to certain conditions.
Air India and Vistara, combined, will compete with domestic rivals like current market leader IndiGo, SpiceJet and Akasa Air.
In July, Indian carriers transported nearly 1.3 crore passengers, marking a 7.3% increase from the previous year, according to government data.
IndiGo maintained its dominance in the domestic market, increasing its market share to 62%. In contrast, Air India's share decreased to 14.3%.
Vistara's market share grew to 10% last month, while AIX Connect and SpiceJet saw their shares decline to 4.5% and 3.1%, respectively.
Akasa Air and Alliance Air also experienced drops in their market shares, falling to 4.7% and 0.9%, respectively.
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