Published 10:03 IST, February 28th 2023
Singapore Airlines to receive 25.1% stake in enlarged Air India group
The deal will provide Singapore Airlines with a 25.1% stake in the enlarged Air India group following its takeover by Tata and merger with Vistara Airlines
- Republic Business
- 2 min read
The deal between Singapore Airlines (SIA) and Tata Sons (Tata) will inject a further SGD 360 million (USD 267 million) into Air India. It will provide Singapore Airlines with a 25.1% stake in the enlarged Air India group following its takeover by Tata and merger with Vistara Airlines.
The November 2022 deal between Singapore Airlines and Tata Sons to further inject USD 267 million into Air India is one of the key strategic initiatives for future growth mentioned in the quarterly financial report. This agreement is still subject to regulatory approval.
SIA in its statement said, "The merged entity will be four to five times larger in scale compared to Vistara and mark a strong presence in all key airline segments in India. The proposed merger will bolster SIA's presence in India, strengthen its multi-hub strategy, and allow it to continue participating directly in this large and fast-growing aviation market."
The airline added, "Deeper collaboration with like-minded airlines is an integral part of the SIA Group's partnerships strategy. This enables SIA and its partners to drive more traffic to their hubs, offer more options to customers, and increase the Group's global footprint."
It is pertinent to mention that Singapore Airlines (SIA) revealed that for the first time since the outbreak of the COVID-19 pandemic, has recorded a net profit of SGD 85 million (USD 62.8 million) for the third fiscal quarter that ended in December 2021.
SIA said in its Financial Year 2021-22 third-quarter business update that the airlines carried around 1.1 million travellers during the quarter, over five times the number from the previous year and double that of the second quarter of FY 2021-22. Passenger capacity also grew, as it increased the number of flights in response to demand created by the VTL. By the end of the quarter, passenger capacity had reached 45 per cent of pre-COVID levels, it added.
Profit increased by more than 117% to SGD1,249 million (USD925 million), despite significant increases in both passenger and cargo revenues to SGD2,316 million in the same quarter last year. Notably, profit from travellers increased by SGD 650 million to SGD 833 million, representing a 355.2% increase on the back of a 556.8% increase in traffic (measured by revenue-passenger kilometers) that outpaced capacity expansion, resulting in a passenger load factor of 33.2%, an increase of 18.9 percentage points.
Updated 10:03 IST, February 28th 2023