Tatas, Singapore Airlines seek CCI nod for Vistara-Air India merger

Deal will not change competitive landscape, say parties

The merger of Vistara with Air India will not lead to any change in the competitive landscape or cause any appreciable adverse effect on competition in India, Tata Sons and Singapore Airlines (SIA) have said in their application to the Competition Commission of India (CCI). The application was filed on Monday.

In November, the two sides announced the plan to merge the airlines to drive synergies and drive market share in the fast growing Indian civil aviation market. Tata group and SIA own 51:49 per cent stake in Vistara.

As a part of the merger deal, SIA has decided to invest Rs 2059 crore in the expanded share capital of Air India for 25.1 per cent stake.  The Tata group will hold the remaining stake. The parties hope to conclude the deal by March 2024.

 The parties have filed applications before CCI under section 5 and 6 of the Competition Act 2002 seeking its nod for the merger. Air India and Vistara are the other co-applicants. Similar applications would be moved with regulators in Singapore and some other countries.

The Tata group is consolidating its aviation business and merging four airlines into two. As a part of the process the group is already working on integration of AirAsia India with Air India Express after a go ahead from the anti-trust regulator last June. In 2021 the CCI had approved Tata Sons' acquisition of Air India from the government.

Under the CCI process parties have to share all the details of overlapping products and services in various geographies to convince the regulator that the transaction is not anti-competitive. In the case of airlines this means passenger and cargo services.

Accordingly, the parties have shared details of domestic and international passenger and cargo markets. The Tata group and Singapore-based SATS Ltd also offer ground handling and in-flight catering services at airports in India and those details too have been provided to the regulator.

Under the process CCI has to decide on a merger application within thirty working days. In case it is not satisfied with the submissions it can initiate a detailed review of the transaction and invite public comments. It has to give its final decision in a maximum of 210 calendar days.