In a complex transaction that has just gotten approval from Indian authorities, Singapore Airlines and Air India are shuffling brands and investments in a plan that will leave India with fewer airlines and with Singapore owning 25% of Air India.
Vistara, a 51/49% joint holding of SIA and Air India will be merged into Air India and Air India’s Air Asia India and Air India Express brands will be merged. SIA is contributing its share of Vistara as well as an additional $250 million investment. The deal required government approval for foreign investment.
Air India’s principal owners are the Tata Group, which bought long-losing Air India from the Indian government several years ago. The deal will ultimately result in an Air India focused on international hubs and major cities along with a more-budget oriented airline focused on the fast-growing Indian domestic market. The alliance with Singapore will give both airlines greater connections and access to each other’s markets.
The Vistara merger is set to take place in November, and the remaining parts of the deal will close soon after.
