 "A-I, Vistara merger in progress, awaiting approvals: Singapore Airlines")
Singapore Airlines on Tuesday said the proposed merger of Air India and Vistara is in progress, and is awaiting foreign direct investment and other regulatory approvals.
Vistara is a joint venture between Singapore Airlines and Tata Group. The merger of Vistara with Air India under a deal, wherein Singapore Airlines will acquire a 25.1 per cent stake in Air India, was announced in November 2022.
While announcing its December quarter results, Singapore Airlines said the merger will bolster its presence in India, strengthen its multi-hub strategy, and allow it to continue participating directly in this large and fast-growing aviation market.
"The proposed merger of Air India and Vistara is in progress, pending foreign direct investment and other regulatory approvals. When completed, it will give SIA (Singapore Airlines) a 25.1 per cent stake in an enlarged Air India Group with a significant presence in all key Indian airline market segments," the release said.
In January, Vistara CEO Vinod Kannan said the merger is expected to be completed by mid-2025, and all legal approvals for the transaction are anticipated by the middle of this year.
For the three months ended December 2023, SIA Group reported an operating profit of SGD 609 million, a decline of 19.3 per cent compared to the year-ago period.
The group's net profit rose 4.9 per cent to SGD 659 million, mainly due to various factors, including a lower tax expense, a share of profits versus a share of losses of associated companies the previous year, a surplus on disposal of aircraft, spares, and spare engines.
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In the latest December quarter, the revenue increased to a record SGD 5,082 million, going past the USD 5,000 million mark for the first time in the group's history.
Singapore Airlines said the demand for air travel remains healthy in the last quarter of FY2023/24 and the first quarter of FY2024/25.
"Nonetheless, passenger yields continue to come under pressure from increased competition as capacity restoration continues across the industry. Heightened geopolitical tensions and economic uncertainty could also weigh on business sentiment and the demand for air travel.
"High fuel prices and inflationary pressures, as well as supply chain constraints, also present a more challenging operating cost environment globally for airlines," the release said.