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Singapore International Airlines (SIA) has confirmed that it is in talks with the Tata Group for the integration of Vistara and Air India.
On Thursday, SIA said it is in confidential discussions with the Tata Group to deepen the existing SIA-TATA partnership and may also include a possible integration of Air India and Vistara. Singapore Airlines owns a 49 per cent stake in Tata SIA Airlines, which operates Vistara, while the remaining 51 per cent is owned by the Indian conglomerate.
Singapore Airlines said that it is exploring a potential merger of Vistara for a bigger foothold in South Asia.
As a part of its strategy, this allows SIA to get access to important sources that complement its strong Singapore hub. “In line with its multi-hub strategy, SIA is currently in confidential discussions with Tata to explore a potential transaction in relation to the securities of Vistara and Air India Ltd, a subsidiary of Tata. The discussions seek to deepen the existing partnership between SIA and Tata and may include a potential integration of Vistara and Air India,” Singapore Airlines said on Thursday in a press statement. Vistara and Air India remained unavailable to comment.
Though SIA has said the discussions are on-going, no definitive terms have been agreed upon between both companies. “There is no certainty or assurance whatsoever that any definitive agreement will be entered into or the potential transaction will materialise or proceed to completion arising from these discussions. Even if a transaction were to materialise, it would be subject to the relevant regulatory approvals, amongst other matters.”
Tata Sons and Singapore Airlines entered into a joint venture and commenced operations on 9 January 2015 of Vistara. Both the Tata Group and SIA have other airlines under its umbrella. While SIA has Scoot, the Tata Group has recently acquired Air India and Air India Express. Along with this, it also has Air Asia India. While Air Asia is being merged with Air India, Tatas are keen to bring Vistara also under a common platform. But the key issue is that SIA competes with Air India on some of the international routes.
Both the companies have aggressive expansion plans. While SIA wants to expand on its multi-hub strategy, the Tata Group has a plan to capture 30 per cent of the market share in India.
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