Air India-Vistara merger: Tatas, Singapore Airlines seek CCI's approval [details]

After announcing plans to consolidate Air India and Vistara in November last year, Tata Group on Monday filed an application with the Competition Commission of India (CCI), seeking the regulatory body's approval for the same. In its application, both Tata Group and Singapore Airlines, which owns 49 percent stake in Vistara, assured the CCI that the merger will not lead to any change in the competitive landscape or have any adverse effect on the competition in India.

Vistara, a 51:49 Joint Venture between Tata Sons and Singapore Airlines Limited ("SIA") was established in 2013 and is India's leading full-service carrier with international operations in Middle East, Asia and Europe. Following the merger pending requisite approvals, SIA will invest Rs 2,059 crore in Air India, and hold 25.1% shareholding in expanded Air India. The Tata Group will hold the remaining stake (51%).

The merger is expected to be completed by March 2024.

Last month, Vistara's chief executive Vinod Kannan said that Air India will absorb all 5,100 Vistara employees as part of the merger plan to consolidate the number of airlines under the Tata group to two from four. Tata Group also plans to merge low-cost carriers AirAsia India with Air India Express and Vistara, leaving two airlines in operation, one for low-cost and the other for full-service.

Vistara revenue in FY23 and operations

Vistara reported a net profit (excluding unrealised foreign currency loss and non-operating income) for the quarter that ended December 2022. The airline crossed the $1 billion revenue mark and remained EBITDA positive in the current fiscal year and reported break-even for the first time in the quarter.

The airline achieved its highest ever domestic market share of 10.4 per cent in July 2022 and maintained its position as the second largest domestic airline in India since then, flying more than 11 million passengers in the calendar year 2022. Vistara also registered a 11 per cent year-on-year growth in the member base for its frequent flyer program, Club Vistara.

Vistara grew its international network by over 180 per cent in 2022, by adding seven additional routes including three new destinations (Jeddah, Abu Dhabi and Muscat). It also grew its domestic network by over 50 per cent, by adding six new routes including two new destinations (Coimbatore and Jaipur).

Meanwhile, the delivery of 10 aircraft and re-delivery of eight aircraft expanded the airline's fleet size to 53 in 2022.