Singapore Airlines has confirmed that it is in talks with India's Tata Group over a potential merger of Air Vistara, a joint venture between the two companies, and Air India, the 100 percent takeover that the Indian group recently completed.
This confirmation comes amid Indian media reports that Tata has completed the acquisition of a 100 per cent stake in Air India and is looking to merge with Vistara.
Tata owns a 51 percent stake in Vistara, while SIA owns 49 percent.
"The discussions seek to deepen the existing partnership between SIA and Tata, and may include a potential integration between Vistara and Air India," SIA said in a statement to the Singapore Stock Exchange.
"Discussions are ongoing and no definitive terms have been agreed between the two parties."
According to a Straits Times report, it is unclear what stake, if any, SIA will receive if Vistara joins Air India, or whether new money will be needed for the troubled Air India group.
SIA's statement indicated that any deal would need a green light from Singapore's competition watchdog and Indian authorities.
Vistara was established in 2013, giving the SIA Group a stake in India's fast-growing aviation sector.
India has strong domestic and international traffic flows, which are expected to double in the next 10 years.
The International Air Transport Association has noted that India will become the world's third largest aviation market, including domestic and international traffic, around 2024.
Indian Civil Aviation Minister Jyotiraditya Scindia said in November 2021 that India had already become the third largest domestic aviation market in the world.
The Straits Times report said that SIA views Vistara's involvement as an integral part of its multi-pronged strategy, giving it access to significant resources that complement its strong position in Singapore.
Vistara provides operational and management expertise, while Tata provides the corporate umbrella and domain knowledge in India.
Vistara's CEO is Singaporean Vinod Kenan, who is on loan from SIA.
His predecessor was his colleague Leslie Thing, who returned to Singapore and is now CEO of Scoot.
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