The National Company Law Tribunal (NCLT) approved the merger of Air India and Vistara, making India’s biggest international airline, PTI reported. After the Air India-Vistara Merger, Singapore Airlines will own 25.1% of Air India. Vistara is a partnership of Singapore Airlines and Tata Group.
According to Tata Group, the combined Air India-Vistara will have 218 planes, making it India’s biggest international and second-largest domestic airline. American Airlines Group, with 1,521 planes, is the world’s largest, while IndiGo, with 350 planes, is India’s biggest domestic airline.
Air India-Vistara Merger: What You Need to Know
The Chandigarh bench of the NCLT gave the thumbs up to a 31-page plan involving Talace, Air India, and Vistara, all Tata Group companies. Air India hopes to wrap up the merger by year-end. The merger scheme got the green light from shareholders and creditors of both airlines, as well as from the Competition Commission of India (CCI) and the Directorate General of Civil Aviation (DGCA). Plus, no big objections came from the Income Tax department or anyone else.
The National Company Law Tribunal (NCLT) has given the green light to the ‘Composite Scheme of Arrangement’ among the petitioner companies and their respective shareholders. This approval falls under Sections 230 to 232 and other relevant provisions of the Companies Act 2013. The NCLT’s decision makes the scheme officially valid and legally binding for the companies and their shareholders.
Vistara’s Dissolution Post-Merger
According to the order, Vistara will cease to exist after the merger without going through the winding-up process. This means that instead of closing down formally, Vistara will merge with the other companies involved in the scheme. This process is expected to happen within nine months from the order date. However, certain approvals and security clearances are required for this to occur.
Wilson and Vistara’s CEO Vinod Kannan told their staff that the merger between Air India and Vistara is expected to be finalized by late 2024 or early 2025. They mentioned that 120 pilots have already been combined from Vistara and Air India, and the companies have finished presenting their cases to the National Company Law Tribunal
The companies involved must ensure that approval for foreign direct investment (FDI) from Singapore Airlines and security clearances from the Directorate General of Civil Aviation (DGCA) or Ministry of Civil Aviation (MOCA) are obtained within this nine-month period. These approvals are crucial for the merger to proceed smoothly and for Vistara to dissolve under the NCLT order.
Tata’s Stake, Vistara’s Fleet, and Air India Group’s Future
According to the deal, Tata will own 74.9% of the new company, while Singapore Airlines will hold 25.1%. The Competition Commission of India (CCI) and Singapore’s competition watchdog have already approved the merger.
Vistara, which started in January 2015, currently operates with a fleet of 70 planes. Apart from merging Air India and Vistara, Tata Group is also in the process of merging its budget carriers Air India Express and AIX Connect (formerly AirAsia India). Once both mergers are complete, the Air India group will have a full-service carrier (Air India) and a low-cost airline (Air India Express).
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