CCI gives its approval to Air India-Vistara merger deal

The Competition Commission of India has approved the merger of Tata Group airlines Vistara and Air India, subject to certain conditions. With this approval, Air India can potentially become the country's largest international carrier and second-largest domestic airline after IndiGo. The approval comes after months when CCI sought clarification on why its proposed merger with Vistara should not be investigated over concerns about competition in the aviation sector. 

"CCI approves the merger of Tata SIA Airlines into Air India, and acquisition of certain shareholding by Singapore Airlines (SIA) in Air India subject to compliance of voluntary commitments offered by the parties," the anti-trust agency posted ion X, formerly Twitter.  

It also added that the details will follow. 

The development is seen as a major step forward for Tata Group in consolidating its aviation business. When the merger was still in talks, Tata Sons Chairman N Chandrasekaran said the merger is an important milestone in the group's "journey to make Air India a truly world-class airline." Air India is focusing on growing both its network and fleet, revamping its customer proposition, enhancing safety, reliability, and on-time performance, he said then. 

Vistara and Air India, two full-service airlines, are part of the Tata Group, while Singapore Airlines (SIA) holds a 49 percent stake in Vistara. 

The Tata group had announced last November that as part of the merger, SIA will invest ₹2,059 crore in Air India. Post the consolidation, SIA will hold 25.1% shareholding in Air India. Tata Sons would own the remaining 74.9 percent stake in the combined entity. 

The deal is to be completed by March 2024. 

As a part of the deal, SIA would pump into Rs 2,059 crore in the expanded share capital of Air India for a 25.1 percent stake.  

Tata Sons and SIA filed a merger application with the CCI in April this year, mentioning that the proposed merger of Vistara with Air India would not alter the competitive landscape or cause any adverse impact on competition in India.