Competition and Consumer Commission of Singapore (CCCS) has conditionally approved the merger between Vistara and Air India, allowing the Singapore Airlines (SIA) group to hold a 25.1% stake in the merged entity, which will be Air India. This approval follows the clearance by the Competition Commission of India (CCI) six months ago.
The approval enables the airlines to collaborate closely on routes, codeshare agreements, and reciprocal benefits. It also allows the merged entity to proceed with integrating its international and domestic networks.
Both the Indian and Singaporean approvals are contingent upon the merged entity maintaining services on routes between India and Singapore. The competition commissions were primarily concerned about the combined entity withdrawing from the market or causing artificial capacity constraints, rather than monopolistic pricing power.
The CCCS order specifies minimum frequencies for routes between Singapore and various Indian cities, based on pre-COVID levels. These frequencies include flights between Singapore and Delhi, Mumbai, Chennai, and Trichy. The calculations consider factors such as Vistara’s mid-year entry into the Singapore market in 2019.
As for the current scenario, Air India has increased its flights to Singapore from Mumbai and Delhi, while maintaining its Chennai operations. Vistara plans to operate more flights than the threshold mentioned in the approval, with double daily flights from Mumbai and daily flights from Delhi.
Singapore Airlines group has made no changes to its pre-COVID operations, consistent with the CCCS order’s requirements.
Comparing April 2024 with December 2019, the India-Singapore market has seen a 5.8% growth in departures and a 12% increase in seat capacity. This growth is attributed to new routes by airlines like IndiGo and adjustments by carriers such as Air India.
The merger of Vistara and Air India, along with investment from Singapore Airlines, is expected to enhance cooperation between the two airline groups. This collaboration could lead to increased connectivity and flights, with both parties likely aiming to surpass pre-COVID levels, barring unforeseen circumstances. Additionally, carriers may seek to renegotiate bilateral agreements to expand their networks further.
