Competition Commission of India greenlights Air India-Vistara merger; conditions applied

CCI approves the merger with subject to compliance of voluntary commitments offered by the parties

   
Competition commission of India air india vistara merger

In a significant development, the Competition Commission of India (CCI) granted approval for the proposed merger of Air India and Vistara, subject to specific conditions. This decision represents a pivotal milestone for Tata Group as it continues to consolidate its presence in the aviation sector.

The entities involved in this consolidation include Tata Sons Pvt Ltd (TSPL), Air India Ltd, Tata SIA Airlines Ltd (TSAL), and Singapore Airlines Ltd.

With this consolidation, Air India shall be India’s leading domestic and international carrier with a combined fleet of 218 aircraft, making it India’s largest international carrier and second largest domestic carrier.

Announcing the approval on X (erstwhile twitter), the CCI stated, “CCI approves the merger of Tata SIA Airlines into Air India, and acquisition of certain shareholding by Singapore Airlines in Air India subject to compliance with voluntary commitments offered by the parties.”

Both Vistara and Air India, as full-service carriers, are integral part of the Tata Group, with Singapore Airlines holding a substantial 49 per cent stake in Vistara.

In November last year, Tata Group announced the merger of Vistara with Air India under a deal wherein Singapore Airlines will also acquire a 25.1 per cent stake in Air India. While SIA shall also invest Rs 2,059 crore in Air India. The deal would mark a major consolidation in India’s fast-growing aviation space.

The application for approval of this amalgamation was submitted to the CCI in April of the current year. Following that, in June this year, the CCI requested additional information concerning the proposed merger. The anti-trust agency raised concerns over competition in the aviation market, as the merger would add on in the market share of the Tata Group to more than 50 per cent in at least seven domestic markets.

At the same time, watchdog spoke over duopoly, with a merged Air India-Vistara and IndiGo controlling more than 75 per cent of the domestic market as smaller rivals such as SpiceJet and Go First struggle.

Upon the conclusion of the merger, Singapore Airlines will receive additional shares in the combined entity through a preferential allotment. This transformative merger will position Air India as the nation’s leading international carrier and the second-largest domestic carrier.

Furthermore, it is worth noting that Air India Express and AIX Connect (formerly known as AirAsia India) are currently in the process of merging, further reshaping India’s aviation landscape.

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