Singapore Airlines said that the proposed merger of Air India and Vistara is still on track, pending approvals from regulatory and competition authorities in various jurisdictions. After the merger is completed, Singapore Airlines (SIA) will hold a 25.1 percent stake in Air India. SIA owns a 49 per cent share in Vistara, while the remaining 51 per cent is owned by the Tata Group.
In a statement, SIA Group mentioned that the Competition Commission of India has already approved the transaction in September 2023. However, it still requires foreign direct investment approval and nods from other regulatory bodies and competition authorities, including India’s Directorate General of Civil Aviation, Ministry of Civil Aviation, National Company Law Tribunal, and the Competition and Consumer Commission of Singapore.
Air India being a favorable long-term investment prospect
Singapore Airlines CEO Goh Choon Phong expressed optimism about Air India being a favorable long-term investment prospect. He pointed to the increasing travel interest among Indians and highlighted the airline’s valuable slots and rights as factors contributing to this potential opportunity.
Once the merger is finalised, SIA will become a significant player in all major segments of the Indian airline market, given India’s status as one of the world’s fastest-growing civil aviation markets. Air India, which was acquired by the Tata Group in January 2022, has ambitious plans for revival and expansion.
In the first half of the fiscal year 2023-24, SIA Group reported a 55.4 percent increase in net profit to SGD 1,441 million from USD 927 million in the previous year’s corresponding period. Total revenue also grew by 8.9 percent to SGD 9,162 million from SGD 8,417 million in the same period a year ago.
As of September 30, the group operated a fleet of 202 aircraft, including 195 passenger aircraft and 7 freighters. SIA’s fleet included 140 passenger aircraft and 7 freighters, while Scoot had 55 passenger aircraft. Additionally, the group has 96 aircraft on order.
Air travel demand
SIA noted that there was strong demand for air travel during the Northern Summer travel season, particularly in passenger traffic to North Asia with the full reopening of China, Hong Kong SAR, Japan, and Taiwan. SIA and its subsidiary, Scoot, carried 17.4 million passengers in the first half of the current fiscal year, a 52.3 percent year-on-year increase, with passenger traffic growing by 38 percent compared to the previous year.
Looking ahead, SIA plans to increase services to various destinations across its network for the Northern Summer 2024 operating season. This includes restoring Airbus A380 services to Frankfurt, deploying widebody Airbus A350-900 medium-haul aircraft to Cairns and Male, and reinstating direct services between Singapore and Barcelona. Flight frequencies will also be raised to pre-pandemic levels or higher across multiple points.
On the other hand, the demand for air freight remained subdued due to inventory surpluses and macroeconomic challenges. Increased competition and lower demand also led to a 46.2 percent drop in cargo yields compared to the previous year.