Singapore Airlines is going to invest Rs 3,195 crore in Air India, after the merger with Vistara

With this merger, Singapore Airlines will further invest Rs 3,195 crore in Air India. This merger of both Tata Group-owned airlines- Air India and Vistara- will come into effect from Monday. On 29 November 2022, an announcement was made regarding the merger of Air India with Vistara. After the merger, the stake of Singapore Airlines in Air India is 25.1 percent. Vistara is a joint venture of Tata Group and Singapore Airlines. The operations started in January 2015. The airline holds up to 49% by Singapore Airlines, while the remaining 51% is held by the Tata group.

Under the merger agreement, Singapore Airlines will contribute Rs 2,058.5 crore in cash for its 49 percent stake in Vistara as well as a 25.1 percent equity stake in the combined entity. Based on the funding infused by Tata in Air India after the merger, Singapore Airlines is expected to invest an additional Rs 3,194.5 crore.

Recently, Air India and Singapore Airlines agreed to considerable expansion of the codeshare under which its network would comprise 11 Indian cities and 40 other international destinations. After this merger, Air India would continue to be the country's only full-service carrier. A full-service carrier is such in which passengers get more services during the journey. Such as, the cost of food is also covered in the ticket price. There are many types of aircraft for this kind of airline, and their focus is to build a large network. While low-cost or budget airlines fly only on special routes, their focus is to provide air travel at a reasonably low cost. Most of the budget airlines have only one type of aircraft.