Air India & Vistara Can Merge To Create India’s Biggest Airlines! Decision Likely By 2023

Air India & Vistara Can Merge To Create India's Biggest Airlines! Decision Likely By 2023
Air India & Vistara Can Merge To Create India’s Biggest Airlines! Decision Likely By 2023

For a potential merger of the airline, Tata Sons has held exploratory talks with Singapore Airlines (SIA) whose joint-venture partner is Vistara, according to the sources.

Air India And Vistara In Merger Talks 

So far, it’s not confirmed, but SIA is learnt to have asked for time until the end of next year to decide on the deal. 

Here, Tata Sons is the holding company of the Tata Group which has recently taken over Air India from the government. 

It is noteworthy here that Vistara is the only other full-service carrier in India.

The sources said, “The Tatas and Singapore Airlines have discussed the merger possibility earlier this year. SIA had even agreed to join the Tata bid for Air India but because of the pandemic, it decided to back out given its poor financial condition,”.

Pending Decision

 To allow the Tata Group to bid for the national carrier, SIA had waived the non-compete clause in Vistara’s contract. 

Presently, Air India is now fully owned by the Tata Group.

But when it comes to Vistara, it is a 51:49 joint venture between the Tatas and SIA.

The sources said, “SIA has asked for time till the end of 2023 to decide whether it wants to go ahead with the merger or not. What they’re looking for is some stability in their financial condition, and that of Air India’s operations post the disinvestment,”.

Further adding, “Discussions on how much equity Singapore Airlines will hold in Air India will be held once it has finalized its intention to merge,”.

A Step Towards Possible Merger

Besides this, the appointment of Air India’s new chief executive is a step in the direction of the possible merger, said the sources.

On Thursday, the Tata Group announced the onboarding of Campbell Wilson, a Singapore Airlines veteran and CEO of its low-cost unit Scoot.

Basically, this appointment as Air India’s CEO & MD was made with the “full blessings” of Singapore Airlines. 

According to the sources, “The two groups sat together and took the call to appoint Wilson at Air India. The decision has been taken with a long-term perspective. Wilson has global aviation experience and comes with long-term commitment to lead Air India’s turnaround,” another source said. Singapore Airlines CEO Goh Choong Phong had said on Thursday: “Campbell is one of our most experienced senior executives who has made many important contributions in key management roles within the SIA Group. While we are sad to lose him, he goes to Air India with our full blessings.”

A Singapore Airlines spokesperson said, “We do not comment on any confidential discussions that we may or may not be having with our partners” while responding to a question on the possible merger of Air India and Vistara.

Similarly, Tata Sons had also not responded on the subject.

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