The Competion and Consumer Commission of Singapore (CCCS) on Tuesday cleared Vistara’s merger with Air India after the airlines committed to maintain capacity on certain routes to pre-Covid level. These include routes from Singapore to Delhi, Mumbai, Chennai and Trichy.

The Singapore anti-trust regulator approval takes the merger once step closer to fruition and also allows Vistara and Air India to collaborate closely on commercial matters. In November 2022, Tata group and Singapore Airlines agreed to merge Vistara with Air India to drive synergies and grab a higher market share. 

Last September, the Competition Commission of India gave its nod to the merger. The transaction is still to receive an approval from National Company Law Tribunal. Full operational merger of two airlines is only expected in 2025. While granting a conditional nod to the merger (and other transactions like Tata group’s acquisition of Air India and commercial co-operation agreement between Air India and Singapore Airlines), CCCS said it identified some competition concerns.

Restricting competition

Even though a number of competing airlines provide air passenger transport services on these routes, the parties have sustained substantial market share in recent years. CCCS also found that the price and capacity coordination between the parties arising from the confluence of the transactions would significantly restrict competition on the affected routes,” it said.

To address concerns the airlines agreed to maintain capacity on four routes. They have also agreed to appoint an independent auditor to monitor compliance of their commitments.

Data from aviation analytics firm Cirium shows that there 372 flights scheduled between Singapore and Delhi in March. Of these 62 are being operated by IndiGo and the remainder by Air India, Vistara and Singapore Airlines. “Singapore Airlines welcomes the CCCS’ approval of the merger of Air India and Vistara. The proposed merger of Air India and Vistara is in progress, pending foreign direct investment and other regulatory approvals,” the airline said in a statement.

When completed, the merger of Air India and Vistara will give Singapore Airlines 25.1 per cent stake in an enlarged Air India Group with a significant presence in all key Indian airline market segments. This will bolster its presence in India, strengthen its multi-hub strategy and allow it to continue participating directly in this large and fast-growing aviation market.