The Competition Commission of India (CCI) has approved the merger of Air India (AI, Delhi International) and Vistara (Delhi International), subject to both airlines abiding by voluntary commitments made to the regulator. Those commitments deal with concerns raised by the CCI that the merger could result in a monopoly on some routes.
While the CCI notice issued on September 1 green-lighted the merger, it did not provide its specific reasons for doing so, saying that it would give a detailed explanation later. However, the CCI did note that the merger involved Singapore Airlines (SQ, Singapore Changi) and Tata Sons acquiring some shares in the merged entity, as well as Singapore Airlines acquiring additional shares in the merged entity via a a preferential allotment.
Singapore Airlines held a 49% stake, and Tata Sons a 51% stake in Tata SIA Airlines Limited (TSAL), which operates Vistara. Tata Sons also owns 100% of Air India and two merging low-cost carriers Air India Express and AirAsia India (to become AIX Connect). The Vistara - Air India merger plan, nutted out by Air India and Singapore Airlines, saw the latter airline agree to take a 25.1% shareholding in Air India. Singapore Airlines had also agreed to commit additional capital once the merger is complete. That amount is expected to exceed INR50 billion Indian rupees (USD604.4 million). The CCI approval also covered the Singaporean carrier acquiring the 25.1% stake.
A Singapore Airlines spokesperson told ch-aviation that the airline welcomed the CCI's decision. "We will continue to work closely with our partner Tata Sons and aim to complete the merger as soon as possible, subject to the remaining approvals from the relevant authorities," the spokesperson said. Air India did not respond to ch-aviation's request for comment.
The CCI's statement did not elaborate on the commitments made by Vistara and Air India, but the regulator had previously raised concerns about the merged entity and IndiGo Airlines (6E, Delhi International) having a 75% domestic market share, creating potentially duopoly-like conditions, especially with competitors such as SpiceJet (SG, Delhi International) in financial strife. The merged entity will also become India's largest international airline. However, Air India CEO Campbell Wilson reportedly met with CCI executives in August to assuage their concerns. Last week's decision in Air India's favour suggests that meeting was a success.
The merger of Vistara and Air India, along with the merger of Air India Express and AIX Connect (previously approved by regulators), are expected to conclude in the first half of 2024.
