CCI approves Vistara merger with Air India

The Competition Commission of India on Friday approved the proposed merger of Air India and Vistara subject to certain conditions while allowing Singapore Airlines to also acquire shares in the newly formed entity. However, the approval is subject to compliance with voluntary commitments made by the carriers.

The development is a major step forward for Tata group in consolidating its aviation business.

In a post on X platform, CCI on Friday said it has approved the merger.

''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 of voluntary commitments offered by the parties,'' it said.

Vistara and Air India are full-service carriers that are part of the Tata group, and Singapore Airlines holds a 49 per cent stake in Vistara.

CCI had been scrutinising the deal and had flagged concerns that the merged entity could have a monopoly in the domestic market.

The CCI said its initial review showed the market share of the Tata group could be more than 50% in at least seven domestic markets, raising competition concerns, sources told Reuters last month.

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. The deal would mark a major consolidation in India's fast-growing aviation space.

The approval for the proposed combination was sought from CCI in April this year. The parties to the combination are Tata Sons Pvt Ltd (TSPL), Air India Ltd, Tata SIA Airlines Ltd (TSAL) and Singapore Airlines Ltd.

The deal will make Air India the country's largest international carrier and second-largest domestic carrier.

After functioning as a state-run company for 69 years, Air India returned to the salt-to-software Tata group’s fold in January 2022.

Once the merger concludes, Singapore Airlines will be allotted additional shares in the merged entity through a preferential allotment. Air India Express and AIX Connect (earlier known as AirAsia India) are in the process of being merged.

With inputs from PTI