Singapore Airlines (SIA) has received approval from the Indian government for Foreign Direct Investment (FDI) in the planned merger between Vistara and Air India.

This regulatory green light, disclosed by SIA in a filling on Friday, marks a crucial milestone in the mergers process, which aims to create one of the largest airline groups in India.

The approval paves the way for SIA to become a key stakeholder in the expanded Air India entity. 

SIA, which previously held a 49 percent stake in Vistara, will now hold a 25.1 percent stake in the merged airline. This will be achieved through an investment of Rs.2,059 crore in the merged entity.

The approval from the Indian Government clears a significant hurdle, allowing SIA to strengthen its position in the Indian aviation market, which is one of the fastest-growing in the world. 

The remaining 74.9 percent of the merged entity will be held by Tata Group, the current owner of Air India. Vistara, which operates as a joint venture between Tata Group and Singapore Airlines, has a 51:49 ownership structure. With the merger, Tata Group will consolidate its control over Air India while benefiting from SIA’s expertise in the global aviation. This partnership is expected to significantly enhance Air India’s operational capabilities and service offerings. 

 

The merger was first announced in November 2022 as part of Tata Group’s broader strategy to streamline its aviation assets.

 

The consolidation in expected to result in a more competitive airline, capable of better competing with domestic and international carriers. The merged entity will have a significant presence in both the domestic and international markets, with a fleet size and network that rival other major global airlines. 

The National Company Law Tribunal (NCLT) had approved the merger in June 2024, after a thorough review process. The NCLT’s approval was one of the ley regulatory steps required to move the merger forward. However, the completion of the parties’ compliance with all applicable is to be finalized in the coming months. 

Industry analysts believe that this merger could lead to improved service quality, expanded route networks, and enhanced operational efficiencies, benefiting passengers and stakeholders alike.