New Delhi: In a preliminary acknowledgment of a potential integration of the two airlines, Singapore Airlines (SIA), the flagship carrier of the Republic of Singapore, informed the stock exchange in the Southeast Asian country on Thursday that it is in private negotiations with Tata Sons to merge Vistara with Air India.

“In line with its multi-hub strategy, SIA is currently in confidential discussions with the Tatas to explore a potential transaction in relation to the securities of Vistara and Air India. The discussions seek to deepen the existing partnership between SIA and Tatas and may include a potential integration of Vistara and Air India,” SIA said in a notification to the Singapore stock exchange.

One of the four airlines operated by the Tata Group is SIA, which owns a 49% interest in Vistara. Others include AirAsia India, Air India, and Air India Express.

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The merger of AirAsia India and Air India was approved by the Indian Competition Commission in June. The combination would also need approval from the National Company Law Tribunal. Executives from both airlines are currently debating how to optimise various integration-related factors, such as products and services.

Similar to this, the Tatas and SIA have started a valuation and due diligence process as they investigate the possible merger of Vistara and Air India.

After the exercise is over, a decision will be made regarding the percentage of the amalgamated company that each side will possess.

In 2021–2022, Vistara lost Rs 2,031 crore while earning Rs 5,226 crore in sales. While earning Rs 19,815 crore in revenue, Air India reported a loss of Rs 9,556 crore.

The Tatas seek to make Air India the flagship airline of their aviation company, while SIA sees India as a key market for its multi-hub plan. In a five-year transformation plan unveiled last month, the group is also aiming for a 30% market share for Air India in the domestic market.

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In August, Air India had a market share of 8.4%. The plan itself suggested that all of the group airlines would combine. Vistara and AirAsia India each had a market share of 10.4% and 4.6%, respectively.

However, SIA has advised its investors that a merger is not guaranteed.

“The discussions are ongoing and no definitive terms have been agreed upon between the two parties. There is no certainty or assurance whatsoever that any definitive agreement will be entered into or a potential transaction will materialise or proceed to completion arising out of these discussions,” it said.

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