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The merger of Air India and Vistara was approved by the Competition Commission of India (CCI) on Friday, allowing the Tata group to form a single, full-service carrier.
“CCI has approved the merger of Tata SIA Airlines into Air India, and acquisition of certain shareholdings by Singapore Airlines in Air India subject to compliance of voluntary commitments offered by the parties,” the regulator said in a statement on X.
The CCI did not say what kind of “voluntary commitments” have Air India and Vistara given. However, the CCI in June issued a notice to Air India asking why its proposed merger with Vistara should not be probed over concerns about competition in the aviation market.
On India's top five busiest routes, Air India Group -- which comprises Air India, Vistara, AirAsia India and Air India Express -- held 38-53 per cent share in June in terms of scheduled flights, according to aviation analytics firm Cirium.
CCI has not issued an order on this matter yet. According to official sources, it is likely to issue an order after a month.
Air India and Vistara did not respond to queries sent by Business Standard at the time of of going to press.
While Air India is wholly owned by Tata Sons, Vistara is a 51:49 joint venture between Tata Sons and SIA. In November 2022, Tata Sons and SIA had announced a plan to merge the two airlines.
As a part of the deal, SIA will invest Rs 2,059 crore in the expanded share capital of Air India for 25.1 per cent stake. Tata Sons will hold the remaining 74.9 per cent stake in the combined entity.
In April, Tata Sons and SIA had filed a merger application with the CCI, stating that the amalgamation of Vistara with Air India will not lead to any change in the competitive landscape or cause any appreciable adverse effect on competition in India. The Tata group is consolidating its aviation business and merging four airlines into two.
While Air India is being merged with Vistara to create a single full-service carrier, AirAsia India is being merged into Air India Express to create a single low-cost airline under Air India.
AirAsia India and Air India Express are owned by Tata Sons and these two carriers’ merger got CCI approval in June last year. Vistara Chief Executive Officer Vinod Kannan had in June said the merger was on track and the airline expects to receive all regulatory approvals by April 2024.
Air India commanded a 9.9 per cent market share in the domestic aviation market whereas Vistara controlled an 8.4 per cent market share in July, according to data from the Directorate General of Civil Aviation.
(With inputs from Ruchika Chitravanshi)
