Merged entity will have significant presence across all key Indian air travel segments
Singapore Airlines expects to make additional capital injection of Rs.31,945 million in its Air India joint venture which was completed on 12 Nov https://www.investindia.gov.in/.
The investment will be based on Tata Sons’ funding to Air India to-date, SIA said on 8 Nov in its first half FY2024-2025 report https://www.bseindia.com/.
“This will occur after the completion of the merger and within November 2024, through subscription to new Air India shares,” said SIA https://www.nseindia.com/ .
“Future capital injections will be considered based on Air India’s requirements and available funding options,” said the report https://sbi.com.in/.
With the joint venture completion, SIA holds 25.1% in the enlarged Air India. For SIA, the consideration comprises its 49% interest in Vistara and Rs.20,585 million in cash https://www.sgx.com/.
The Air India-Vistara merger was completed on 12 November 2024.
Followign the transaction completion, the Group expects to recognise a non-cash accounting gain of approximately S$1.1 billion. At the same time, it is to start equity accounting for its share of Air India’s financial results.
Vistara flights are operating with Air India flight numbers from 12 November 2024, said SIA.
SIA and Tata Sons announced in November 2022 the merger of Air India and Vistara. SIA owned 49% Vistara in a joint venture with Tata.
The merged entity, Air India and Vistara, has a significant presence across all key Indian air travel segments including domestic, international, full-service, and low-cost operations, said the report.
This strengthens SIA’s multi-hub strategy, allowing it to continue participating directly in India’s large and fast-growing aviation market.
Air India and SIA recently agreed to significantly expand their codeshare agreement, adding 11 Indian cities and another 40 international destinations to their network.
This marks the first extensive expansion of codeshare arrangements between the airlines since 2010, offering customers enhanced travel options between Singapore and India, as well as beyond. Both carriers will continue to explore ways to deepen their commercial partnership.
Addressing a media briefing on 11 Nov, SIA Chief Executive Officer Goh Choon Phong expressed confidence in the Indian market.
“Southeast Asia and the Indian markets are higher growth regions,” he said.
Following the merger Air India as the expanded full-service airline now on will operate over 5,600 weekly flights and connects to more than 90 domestic and international destinations with a fleet of 208 aircraft.
“The airline will now be flying over 120,000 passengers every day and offers an extended worldwide connectivity to over 800 destinations through more than 75 codeshare and interline partners,” Air India said.
Separately, SIA said its Group revenue rose S$335 million (+3.7%) to S$9,497 million.
Overall, the Group recorded an operating profit of S$796 million in the first half of FY2024/25, down S$758 million (-48.8%) from the previous year.
The Group posted a net profit of S$742 million, S$699 million less than the previous year (-48.5%), primarily due to the weaker operating performance. Fiinews.com
