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Singapore Airlines investment in Air India : After the merger with Vistara, Singapore Airlines will invest an additional Rs 3,195 crore in Air India. The merger of both Tata Group airlines Air India and Vistara will come into effect from Monday. The merger of Air India and Vistara was announced on November 29, 2022. After the merger, Singapore Airlines' stake in Air India will be 25.1 percent.
Vistara Airlines was a joint venture between Tata Group and Singapore Airlines. The airline started operations in January 2015. Singapore Airlines had a 49 percent stake in it and the remaining 51 percent was held by Tata Group.
Under the merger agreement, Singapore Airlines will contribute Rs 2,058.5 crore in cash for its 49 percent stake in Vistara as well as a 25.1 percent equity stake in the combined entity. Singapore Airlines is expected to invest an additional Rs 3,194.5 crore post the merger, based on the funding infused by Tata in Air India.
Recently, Air India and Singapore Airlines have agreed to significantly expand their codeshare agreement, under which their network will include 11 Indian cities and 40 more international destinations. After this merger, Air India will be the only full service carrier in the country.
In full service carriers, passengers get more services during their travel. For example, the cost of food is also included in the ticket price. This type of airline has many types of aircraft and its focus is on creating a large network. On the other hand, low-cost or budget airlines operate only on specific routes. Their focus is to provide air travel at a low cost. Most budget airlines have only one type of aircraft.
