On Wednesday, Singapore Airlines Group (SIA) informed that the proposed Air India and Vistara merger, which is awaiting foreign direct investment and other approvals, will strengthen its multi-hub strategy. The merger will also allow it to continue directly participating in the fast-growing aviation market of India.
Helped by robust air travel demand, the group posted a 24 per cent rise in net profit at 2,675 million Singapore dollars for FY 2023-24.
About the Air India-Vistara merger, the Singapore Airlines Group said foreign direct investment and other regulatory approvals are pending.
Between Singapore Airlines and Tatas, Vistara is a collaborative venture.
Once done, the merger will give the group a 25.1 per cent stake in an enlarged Air India Group with a significant presence in all key Indian airline market segments, the release said.
Merger to boost Singapore Airlines Group’s multi-hub strategy
This will boost Singapore Airlines Group’s multi-hub strategy, and allow the group to continue participating directly in “this large and fast-growing aviation market,” the release added.
The merger was announced in November 2022. In September 2023, the deal obtained permission from the Competition Commission of India (CCI), subject to certain conditions.
On the outlook, the SIA said the demand for air travel stays healthy in the first quarter of FY2024/25, supported by a firm pick up in forward bookings to North Asia and South East Asia.
Passenger yields will probably continue to moderate due to increased capacity injection by airlines, mainly in the Asia-Pacific region, it noted.
However, it also said that the airline sector continues to face challenges including rising geopolitical tensions, an uncertain macroeconomic climate, supply chain constraints, and high inflation in multiple parts of the globe.