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Singapore's competition regulator CCCS on Tuesday said it has given conditional approval for the proposed merger of Air India and Vistara, more than a year after the announcement of the deal.
This was one of the key approvals required for the transaction.
The merger of Vistara with Air India under a deal, wherein Singapore Airlines will acquire a 25.1 per cent stake in Air India, was announced in November 2022. Vistara is a joint venture between Singapore Airlines and Tata Group.
The Competition and Consumer Commission of Singapore (CCCS) has granted conditional approval for the deal after accepting certain commitments from Air India, Singapore Airlines and Vistara to address possible anti-competition concerns.
The commitments include those pertaining to scheduled air passenger transport services on the Singapore-Delhi (SIN-DEL), Singapore-Mumbai (SIN-BOM), Singapore-Chennai (SIN-MAA) and Singapore-Tiruchirapalli (SIN-TRZ) routes.
The parties have committed to maintain capacity on these routes at pre-pandemic (calendar year 2019) levels, according to a release issued by the CCCS.
Other commitments include appointing an independent auditor to monitor compliance and submit a written annual report.
Also, each of the parties has to submit an interim report, which monitors their respective compliance with the committed capacity levels for every three weeks of non-fulfilment in a report year, the release said.
In a statement on Tuesday, a Singapore Airlines spokesperson welcomed the approval and said the proposed merger is in progress, pending foreign direct investment and other regulatory approvals.
From December 8, 2023, to February 1, 2024, CCCS conducted a market testing exercise on whether the proposed commitments would sufficiently address the competition concerns arising from the transactions.
After evaluating the feedback provided, CCCS said the proposed commitments were sufficient to address the competition concerns.
According to Singapore Airlines, the merger will bolster its presence in India, strengthen its multi-hub strategy, and allow it to continue participating directly in this large and fast-growing aviation market.
In September 2023, the Competition Commission of India (CCI) approved the deal, subject to certain conditions.
As part of the commitments to the CCI, Air India and Singapore Airlines will ensure minimum capacity on various domestic and international routes, including Delhi-Sydney and Delhi-Paris.
In January this year, Vistara CEO Vinod Kannan said the merger is expected to be completed by mid-2025, and all legal approvals for the transaction are anticipated by the middle of this year.