Singapore Airlines on Tuesday (Nov 29) announced that Vistara will be merged with Tata group-owned Air India.

Tata group owns a 51 per cent stake in Vistara, and the remaining 49 per cent shareholding is with Singapore Airlines (SIA).

As part of the transaction, SIA will also invest Rs 2,058.5 crore in Air India.

''This would give SIA a 25.1 per cent stake in an enlarged Air India group with a significant presence in all key market segments. SIA and Tata aim to complete the merger by March 2024, subject to regulatory approvals,'' SIA said in a release.

Vistara, which is now the country's second largest airline in terms of domestic market share, began operations on January 9, 2015, from Delhi to Mumbai.

In Oct 2022, Vistara had a market share of 9.2 per cent.

At present, Vistara connects 43 domestic and overseas destinations, operates more than 260 flights daily. It has a fleet of 54 aircraft and close to 4,500 employees.

In Oct, SIA disclosed to Singapore Exchange that it was holding discussions with Tata Sons for the merger of Vistara and Air India.

Since it acquired Air India and its low-cost international arm Air India Express from Union Government in January this year, Tata Sons has been working to consolidate all their airline businesses into one group, including its joint venture with AirAsia Berhad in AirAsia India.

Realisation Of Long Cherished Dream

Back in 1994, Tata group and Singapore Airlines (SIA) made efforts to set up a joint venture airline in India. Six years later, they again tried to enter the country's aviation market, this time by teaming up to acquire stakes in Air India. It did not ,materialise.

After the restrictions on foreign investments in the airline space was lifted in 2012, Tata group and Singapore Airlines again sought approval for a tie-up and obtained the clearance in October 2013. And in November 2013, TATA SIA Airlines Ltd -- the holding company of Vistara -- was incorporated.

However, the two attempts did not take-off. Finally, they realised their dream as Vistara took to the Indian skies in January 2015.

(With Inputs From PTI)