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Air India and Vistara Merger by March 2024

  • Posted on November 30, 2022
  • News
  • By Akta Yadav
The merger of Air India and Vistara was approved on Tuesday by Singapore Airlines (SIA) and Tata Sons, with SIA receiving a 25.1% stake in the combined company in exchange for an investment of Rs 2,058.5 crore ($250 million) in Air India. This 25.1% stake will be in an expanded Air India group, which will include Air India, Vistara, AirAsia India, and Air India Express. Subject to regulatory approvals, the merger of all airlines is anticipated to be completed by March 2024. Soon, Air India Express and AirAsia India will merge to form a single business that will provide affordable flight options... This process is already underway. SIA intends to fund the entire investment from its internal cash flow, which was S$17.5 billion as of September 30, 2022. Additionally, SIA and Tata have agreed to take part in future capital infusions that may be necessary to finance the expansion and operations of the larger Air India in FY2022/23 and FY2023/24. SIA's share of any additional capital injection, based on its 25.1% post-completion stake, could be up to Rs 5,020 crore ($615 million), payable only after the merger's conclusion, according to a statement released by SIA on Tuesday. The precise sum will depend on several variables, such as how well the expanded Air India's business plan is going and how readily it can access alternative sources of funding. SIA continued by saying that it intended to use its internal cash resources to fully fund any additional capital infusions. On September 21, The Indian Express reported that the merger possibility was being discussed with a goal of completion by 2024. Through this deal, SIA will strengthen its relationship with Tata and get an immediate strategic stake in a company that is four to five times bigger than Vistara in terms of size. The merger would strengthen SIA's presence in India, improve its multi-hub strategy, and enable it to keep directly competing in a sizable and quickly expanding aviation market," the airline added. Tata Sons are among the most reputable and well-known companies in India. When we worked together to found Vistara in 2013, we created a market-leading full-service carrier that has since won a plethora of accolades on a global scale. With this merger, we have the chance to strengthen our bond with Tata and actively take part in the aviation market's exciting new growth phase in India. Together, we will support Air India's transformation program, tap into its enormous potential, and help it regain its status as a preeminent airline on the international stage. The statement included a quote from Singapore Airlines CEO Goh Choon Phong. "Our goal is to transform Air India into a truly world-class airline, and the merger of Vistara and Air India is a significant step in that direction. Intending to give every customer a fantastic customer experience, we are transforming Air India. Air India is concentrating on expanding both its network and fleet as part of the transformation, revamping its customer proposition, and improving safety, dependability, and on-time performance. The possibility of building a strong Air India that would provide full-service and affordable services on both domestic and international routes excites us. The statement included a quote from Tata Sons Chairman Natarajan Chandrasekaran.
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Akta Yadav

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