The Competition Commission of India (CCI) has approved the merger of Vistara and Air India.
“The CCI has approved the merger of Tata SIA into Air India and the acquisition by Singapore Airlines (SIA) of a stake in Air India, subject to voluntary undertakings by the parties,” the Competition Commission of India said in a statement.
Vistara is a joint venture (JV) between the Tata Group and Singapore Airlines. The airline was established in 2015. Tata Group has said it will merge Vistara with Air India, AirAsia and Air India Express, eventually owning a full-service carrier Air India and a low-cost carrier Air India Express.
The merger was reviewed by the CCI earlier this year. career line Talk to multiple sources. The voluntary pledge proposed by Air India includes divesting moments on certain routes on overlapping routes, the first person said. This also includes keeping capacity unchanged on the India-Singapore route and certain domestic routes where Air India and Vistara services overlap, a person familiar with the matter said.
“The committee is concerned that the merger may result in reduced capacity and higher fares. Air India has committed not to cut or scale back capacity. Instead, the plan is to add flights,” the source added.
The company run by Sons of Tata has told antitrust watchdog the Competition Commission of India (CCI) that the proposed merger of the two companies will not have an adverse effect on competition, as most of the routes that the merged entity will operate will be operating, according to a report. Competitors exist.
With the approval of the CCI, Air India and Vistara will start adjusting their flight schedules and networks. The two parties will also coordinate on reservation systems, loyalty programs and more.
Approval from the National Company Law Tribunal and other regulators is also required, and the full merger is expected to be completed by next June.
Approval of the CCI is contingent on compliance with the voluntary commitments of the parties. Air India has committed to tweaking its plans, sources said.
However, legal experts believe the approval could face legal scrutiny as the CCI currently has an insufficient quorum (only the chairperson and one member). There are indications that the CCI has invoked the doctrine of necessity to approve the merger.
Tatas re-entered the airline market in 2013 with Vistara and AirAsia India. Vistara is a 51:49 joint venture between Tata Sons Private Limited and Singapore Airlines Limited (SIA). In January last year, Tata Group also acquired Air India and Air India Express.
In November last year, Tata Group and SIA said the latter would dilute its stake in Vistara. As part of the merger deal, Singapore Airlines (SIA), which currently holds a 49% stake in Vistara, will invest Rs 2,059 crore for a 25.1% stake in the merged Air India. The companies later said they would merge Vistara with Air India by March 2024.
According to DGCA data for July, Vistara has a market share of 8.4%, while Air India has a market share of 9.9%. AirAsia holds a 7.5% stake. Combined, Air India could hold more than 30% of Air India’s market share, second only to IndiGo, which has a 63% market share.
At last news, Vistara had more than 5,500 employees, including 2,500 pilots and cabin crew. In the last fiscal year alone, the airline employed more than 2,100 people. The airline currently operates a fleet of 53 aircraft, including 42 Airbus A320neo, six Airbus A321, two Boeing 737-800NG and three Boeing 787-9 Dreamliners, and has carried more than 42 million passengers since its inception.
Earlier this year, Tata-owned Air India recently announced a major order with Boeing and Airbus for 470 planes and now plans to hire more than 4,200 cabin crew trainees and 900 pilots this year.
(Comments from Srivats Krishnaswamy)