Vistara and Air India merger, agreement between Singapore Airlines and Tata Sons
Singapore Airlines said on Tuesday that Vistara Airlines will be merged with Tata Sons’ Air India.
According to the news agency PTI report, Tata Sons currently holds 51% shareholding in Vistara Airlines and 49% shareholding of Singapore Airlines.
Under the agreement reached between Singapore Airlines Limited (SIA) and Tata Sons regarding this deal, SIA will have 25.1 per cent stake in Air India.
SIA has said in a statement that under this agreement, the company will invest $ 250 million (Rs 2058 crore) in Air India.
After getting the approval of the regulators, it is expected that this deal will be completed by March 2024. After the merger, it is believed that companies like Indigo, which dominate the airline sector in India, will face a tough challenge.
Aviation market
Singapore Airlines had been trying for a long time to make a place in the domestic market of India. But after this agreement, it will be helped to strengthen its foothold in the world’s fastest growing aviation market.
A lot of expectations are also being raised for Tata Sons from the agreement. The company hopes that this agreement will improve the condition of Air India and low-cost airline Air India Express.
According to the report of news agency Reuters, Air India Express is going to merge with Air Asia India. Tata has already bought Air Asia India from its old partner Air Asia.
Singapore Airlines has said that it has agreed with Tata to invest more capital if Air India needs funds over the next two financial years.
SIA may have to spend up to $ 615 million for a 25.1 percent stake, but this amount is to be paid only after the merger.
The company has said that it will use its internal resources to enhance the development plan.
Commenting on the agreement, SIA Chief Executive Officer Goh Choon Fong said, “We look forward to working together to drive Air India’s transformation plan, deliver on its potential and position it as a leading airline on the global stage.” will do.”
In a statement issued by SIA, Tata Sons Chairman Natarajan Chandrasekaran has been quoted as saying that his company is excited about the partnership with Singapore Airlines to strengthen Air India.
Acquisition of Air India
Earlier, in October last year, the Tata Group, which traded from salt to software, had bought 100% stake in the debt-ridden government airlines company Air India for Rs 18,000 crore.
It is noteworthy that seven companies had shown interest to buy Air India.
In the race to buy Air India, Tata Sons beat the promoter of Spice Jet. As a price, it was decided that Tata Sons would take over Air India’s debt of Rs 15,300 crore and would pay the remaining amount in cash.
Welcoming Air India’s ‘homecoming’, Ratan Tata then said, “The Tata group winning the Air India bid is great news. We will have to put in a lot of effort to make Air India stand again. We hope We believe that this will create strong business opportunities for the Tata Group with its presence in the aviation industry.”
“Emotionally speaking, under the leadership of JRD Tata, Air India at one point of time achieved the status of one of the most prestigious airlines in the world. The Tata group regained the credibility and respect that Air India enjoyed in its early years. Got a chance to do it.
If JRD Tata were among us, he would have been very happy. We thank the government for the recent policy adopted to open selected industries to the private sector. Wellum back, Air India.”
The government had tried many times before to sell Air India, but no buyers were found for it. This time the government had made a lot of changes in the terms of selling Air India.
Why is Air India so attractive?
Despite running at a loss, Air India has a lot of assets. It has its own slot at Heathrow Airport in London. A fleet of 130 aircraft along with thousands of trained pilots and crew.
With this deal, the Tata group has got 4400 domestic and 1800 international landing and parking slots at the country’s airports and 900 slots abroad.
Apart from this, Air India has real estate worth crores of dollars. According to the Ministry of Civil Aviation, it was valued at $6 billion in the month of March 2020.
Air India has a collection of 40,000 artifacts, including an ashtray gifted by Spanish artist Salvador Dali.
India’s aviation sector is growing at an annual rate of 20 percent. Analysts say that the full potential of the Indian market has not been tapped yet. Experts say that there is a lot of potential for the Tata group in Air India.
