Paving the way for a mega full service carrier (FSC), the Competition Commission of India approved the merger of Vistara into Air India.
Tatas currently own 51% of Vistara, while Singapore Airlines holds 49% of the company. Following the merger, SIA will possess 25.1% of the new Air India, with Tatas holding the remaining shares. The "acquisition of certain shareholding by SIA in AI subject to compliance of voluntary commitments offered by the parties" was also given approval by CCI.
The Tatas plan to have a mega FSC, AI, and a big low-cost carrier by integrating AirAsia India into AI Express. While the LCC merger has been approved by CCI and is on track for this year's end, the FSC merger has to be completed by next March. Following IndiGo, the combined companies will command the top spot for international air travel. Both IndiGo and AI have significant growth plans, with 970 and 470 aircraft on order, respectively.
On the Vistara-AI merger, CCI said in a statement, “The proposed combination envisages… in consideration of the merger, acquisition of shares in the merged entity by SIA and Tata Sons and acquisition of additional shares in the merged entity by SIA pursuant to a preferential allotment.” SIA will invest £205.9 million.