Singapore Airlines to invest ₹3,194.5 crore more into Air India after Vistara merger for 25.1% stake
Singapore Airlines (SIA) Group will invest an additional ₹3,194.5 crore into the newly merged entity comprising of Vistara and the Tata-owned Air India, according to an announcement the group made on Friday, November 8, 2024, along with its financial results.
This is for SIA to get a 25.1% stake in the new entity. Vistara is the operating name for Tata SIA Airlines Limited, which is a joint venture between Tata Sons and Singapore Airlines. It commenced operations on January 9, 2015.
The investment will be made after the merger’s completion and within November 2024, through subscription to new Air India shares, the group said, adding that future capital injections will also be considered based on “Air India’s requirements and available funding options.”
The merger consideration for SIA includes its 49% stake in Vistara along with ₹2,058.5 crore in cash, in exchange for a 25.1% equity interest in the merged entity or the enlarged Air India.
The SIA Group expects to see a non-cash accounting gain of about S$1.1 billion after the transaction, according to its statement.
The merger which was first announced in November 2022, also includes an agreement for SIA to contribute its share of any funding which was previously provided by Tata before the merger’s completion, along with related funding costs up to ₹5,020 crore, allowing SIA to maintain a 25.1% stake in Air India.
“The merged entity will have a significant presence across all key Indian air travel segments including domestic, international, full-service, and low-cost operations,” its statement read.
Apart from this, Air India and Vistara have also agreed to significantly expand their codeshare agreement by adding 11 Indian cities and another 40 international destinations to their network, marking the first codeshare arrangement expansion between the two since 2010, when they offered customers travel options between Singapore and India, as well as beyond.
How was Singapore Airlines’ Q2/H1 results?
Singapore Airlines (SIA) Group posted a 48.5% plunge in its net profit for the first half of 2024-25, which was at $742 million, compared to the first half of 2023-24, which was at $1.44 billion.
This is because despite a revenue gain of 3.7% to $9.49 billion from $9.16 billion earlier, its expenses also increased by 14.4% from $7.609 billion to $8.702 billion. This was primarily due to net fuel costs surging 19.6% to $2.73 billion from $2.28 billion earlier.