One of the final steps before Air India’s pending merger with Vistara has been completed, with Singapore’s competition authority giving its conditional approval for the deal.
The 5 March ruling follows recent remarks by Air India chief executive Campbell Wilson that Singapore was the only remaining competition authority from whom approval remained outstanding.
However, the ruling from the Competition & Consumer Commission of Singapore (CCCS), lists four routes between the city-state and India that are of concern: Bombay, Chennai, Delhi, and Tiruchirappalli.
“Even though a number of competing airlines provide air passenger transport services on these routes, the parties have sustained substantial market share in recent years,” says CCCS.
“CCCS also found that the price and capacity coordination between the parties arising from the confluence of the transactions would significantly restrict competition on the affected routes.”
Of particular concern are Singapore Airlines’s codeshare arrangements with Vistara, in which the Singapore carrier owns a 49% stake – the remaining 51% is held by Tata Group, the owner of Air India.
Following the merger, SIA will own 25.1% of Air India, with the balance held by Tata Group. Both carriers are members of the Star Alliance.
To address the concerns, the carriers have agreed to maintain capacity on the four routes at 2019, or pre-pandemic, levels.
In addition, they will hire an independent auditor to ensure compliance, produce a written report annually, as well as meet other reporting obligations.
The merger still requires legal approval in India.
Wilson is overseeing the restructuring of the Tata Group’s airline holdings. This will see Air India merged with Vistara, and Air India Express merged with AIX Connect, formerly AirAsia India. March 2024 was previously set as the target date for the completion of the merger, first announced in 2022.
