Air India & Singapore Airlines partnership: What’s in it for both sides

On Nov 29, Tata Group, the Indian multinational conglomerate, announced the merger of its airlines, Vistara and Air India, creating India’s largest international carrier and second-largest domestic airline. Vistara, a joint venture between Tata and Singapore Airlines (SIA) established in 2013, has Tata owning 51 per cent and SIA holding 49 per cent.

The merger is expected to be completed by March 2024, subject to regulatory approvals, including from India’s aviation ministry, central bank, and antitrust authorities. Following the merger, SIA will hold a 25.1 per cent stake in Air India. Singapore’s national carrier has also committed to investing S$360 million into Air India to “fund the growth and operations of the enlarged Air India.”

Tata’s goal for this merger is to rebuild Air India into a “world-class airline,” according to Tata Group Chairman N Chandrasekaran. Once known for its elaborate decor and exceptional service, Air India’s reputation suffered in the mid-2000s due to financial difficulties, which led to complaints about its business class seating, flight delays, and payment issues with suppliers and staff.

With Singapore Airlines widely regarded as one of the world’s best carriers, Air India stands to benefit significantly from SIA’s expertise in elevating its service standards and restoring its reputation. “We are transforming Air India to deliver a great customer experience every time,” said Chandrasekaran, adding his appreciation for SIA’s continued partnership.

For Singapore Airlines, the merger offers immediate access to a larger entity, four to five times the size of Vistara. SIA will gain valuable access to key slots and air traffic rights in strategic airports across India and globally.

“With this merger, we have an opportunity to deepen our relationship with Tata and participate directly in an exciting new growth phase in India’s aviation market,” said SIA CEO Goh Choon Phong. “We will work together to support Air India’s transformation, unlock its significant potential, and restore it to its position as a leading global airline.”