The Competition Commission of India has approved the merger of the operator of Vistara Tata SIA Airlines and Air India.
It also approved the acquisition of 25.1% stake in Air India by Singapore Airlines, which is the Tata Group's joint venture partner in Vistara, the competition watchdog informed in a post on social media platform X on Friday.
The Tatas' plan to earn back the pride of the Maharaja is likely to get a shot in the arm from this consolidation.
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Vistara, a 51:49 joint venture between Tata Sons and Singapore Airlines, is a full-service carrier established in 2013 with international operations in the Middle East, Asia, and Europe.
As part of the merger of Vistara with Air India, Singapore Airlines was expected to invest Rs 2,059 crore in Air India and hold 25.1% stake.
The merger will create India's largest international and second largest domestic airline.
With Air India Express and AirAsia India already under its wing, Vistara's merger with Air India will conclude the Tata Group's attempt to consolidate all its airlines.
In terms of market share, a combined Air India will be second only to IndiGo (InterGlobe Aviation Ltd.) in the domestic market. The combined market share of AirAsia India, Vistara, and Air India was 25.8% in July, according to the data from the Directorate General of Civil Aviation.
IndiGo had a market share of 63.4% in the same period.
Air India, which recently introduced a new brand identity, is being seen as one of the most challenging turnarounds in aviation history, after the Tatas took over the company from the government in a divestment process that concluded last year.
The merger approval also clears the way for Singapore Airlines to invest up to Rs 5,020 crore in Air India, which are payable only after the completion of merger.
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