Singapore Airlines (SIA) Group, the flag carrier of Singapore, has confirmed it would invest an additional INR 3,195 million (USD 378 million) into the newly merged entity of Tata-owned Air India and Vistara. 

According to a press statement by SIA, this funding commitment highlights its confidence in the potential of the expanded Air India operations across key domestic and international air travel markets. 

The merger marks a significant milestone for Tata SIA Airlines, which was operating as Vistara, a joint venture between Singapore Airlines and Tata Sons, since it was launched in January 2015.

Following the completion of the merger in November, SIA says it will inject capital through the subscription to new Air India shares, retaining a 25.1 pc equity stake in the larger entity. 

The group has stated that future investments will be evaluated based on Air India’s operational requirements and funding options. 

This merger consideration includes SIA’s 49 pc stake in Vistara, along with an additional INR 2.58 billion (USD 31 million) in cash, allowing SIA to maintain its stake while securing a significant role in Air India’s growth trajectory.

Singapore Airlines says it anticipates a non-cash accounting gain of approximately SGD 1.1 billion (USD 823 million) following this merger. 

The landmark merger, initially agreed upon in November 2022, also outlines SIA’s commitment to cover its share of any prior funding contributions made by Tata Sons, totalling up to INR 50 billion (USD 592 million) to preserve its 25.1 pc ownership in the newly consolidated airline.

According to SIA’s statement, the integrated entity will strengthen Air India’s market position, enhancing its service offerings across multiple segments: domestic, international, full-service and low-cost travel. 

The statement adds that Air India and Vistara are expanding their codeshare arrangement to include 11 additional Indian cities and 40 international destinations. 

This is the first significant expansion of their codeshare agreement since 2010, previously offering travellers combined routes between Singapore, India, and beyond.

The statement adds that this merger also symbolises SIA’s strategic approach to securing long-term value in the Indian aviation market, where Air India, under Tata Group’s management, has been aggressively pursuing modernisation and fleet expansion initiatives.