Singapore's Competition Commission approves Air India-Vistara merger with conditions, FDI approval awaited

Singapore's Competition Commission approves Air India-Vistara merger with conditions, FDI approval awaited

Air India – Vistara Merger Update: The merger of Air India and Vistara has been approved. Singapore's competition watchdog has given this approval. The Singapore Competition Watchdog said it approves the merger of Tata Group-owned Air India and Tata-Singapore Airlines joint venture airline Vistara with conditions. 

Approval received after this commitment 

Competition Commission of India (CCI) has already approved the deal. But the Competition and Consumer Commission of Singapore (CCCS) had some apprehensions regarding the merger of Air India and Vistara. According to a Reuters report, Singapore's Competition Commission said that these airlines have the most market share in direct flights between Singapore and India's big cities New Delhi, Mumbai, Chennai and Tiruchirappalli, which is a cause for concern. To address the concerns of the Competition Commission, both the airlines said that they will operate flights as per pre-Covid levels. They will also appoint independent directors to monitor compliance and submit capacity commitments, annual reports and interim reports. After this confidence, the Competition Commission of Singapore has approved the deal. 

Regulatory and FDI approvals yet to be received 

The merger of Air India is yet to get other regulatory and foreign direct investment approvals. A Singapore Airlines spokesperson said, Singapore Airlines will continue to work with its partner Tata Sons to obtain the remaining approvals to complete the merger process. However, no statement has come from Air India. According to this deal, after the merger of Air India and Vistara, Tata's stake in the new entity will be 74.9 percent while Singapore Airlines will have 25.1 percent stake. Currently, Singapore Airlines holds 49 percent stake in Tata Singapore Airlines. 

Tata will establish a big empire in the aviation sector 

Tata wants to merge its four airlines brands with Air India Limited and through this merger wants to establish a big empire in the aviation sector. After the decision of merger, Air India will become the second largest airline in the country in terms of number of aircraft and market share. In January 2022, Tata acquired Air India from the Government of India. Before the acquisition of Air India, Tata Group was already operating two airline brands named Vistara and AirAsia.  

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