Singapore Airlines Commits Additional Rs 3,194.5 Cr In Air India Post-Vistara merger

Singapore Airlines (SIA) has committed an additional Rs 3,194.5 crore investment in Tata-owned Air India, strengthening its presence in the Indian aviation market. This move follows the imminent merger of Vistara, a full-service airline jointly owned by Tata Group and SIA, with Air India. 

The merger, set to be finalised on 11 November 2024, will give SIA a 25.1 per cent equity stake in the newly consolidated Air India. SIA’s investment reflects both its 49 per cent holding in Vistara and an infusion of Rs 2,058.5 crore in cash as part of the transaction.

This integration is a significant consolidation within India's rapidly growing aviation sector. As part of the arrangement, SIA will recognise a non-cash accounting gain estimated at 1.1 billion Singapore dollars and will begin equity accounting for its share of Air India's financial outcomes. 

The agreement also includes SIA’s commitment to contribute its share of funding previously provided by Tata to Air India, along with funding costs of up to Rs 5,020 crore to maintain its 25.1 per cent stake. This capital injection will total approximately Rs 31,945 million (SGD 498 million) and is expected to be completed in November 2024 through new share subscriptions in Air India.

The merged Air India entity will strengthen its position across key market segments, including domestic, international, full-service, and low-cost travel, leveraging SIA’s multi-hub strategy to directly participate in India’s robust aviation growth. Additionally, Air India and SIA recently expanded their codeshare arrangement to include 11 Indian cities and 40 international destinations, further enhancing connectivity across both carriers' networks and offering passengers broader travel options.