Singapore Airlines (SIA) is set to get a 25.1% stake in the newly enlarged Air India group. This would make SIA the single biggest shareholder in the group, which includes Air India, Alliance Air and Air India Regional, as reported by the Economic Times. This move is likely to give SIA a foothold in India’s aviation market, which is the world’s third-largest by passenger traffic.
Singapore Airlines
The Air India group will be a conglomerate of three airlines, with Air India as the primary carrier. Alliance Air and Air India Regional will operate regional flights to tier-2 and tier-3 cities in India. The government will retain a 24% stake in the new entity, while the Employees’ Trust will have a 5.1% stake.
The Air India-SIA deal is expected to be completed by the end of March 2021. SIA’s entry into the Indian market will add competition to the likes of IndiGo and SpiceJet. SIA is looking to capitalize on the growing Indian aviation market and expand its footprint in the country.
The move is part of SIA’s larger strategy to diversify its business and tap into the growing demand for air travel in India. The airline recently partnered with InterGlobe Aviation, the parent company of IndiGo, to launch a joint venture in India. SIA also invested in Vistara, an Indian airline operated by Tata SIA Airlines, in 2015.
The Air India-SIA deal is likely to bring in much-needed funds for Air India and help it turn around its financial condition. It will help Air India reduce its debt and improve its financial health. With SIA’s presence in the Indian aviation market, customers can expect improved services and cheaper fares.
SIA’s entry into India’s aviation market could also bring in more investors and provide a boost to the Indian economy. It is expected to create jobs in the aviation sector, as well as boost tourism revenue.
The Air India-SIA deal is a win-win for both parties. SIA will gain access to India’s growing aviation market, while Air India will benefit from the infusion of funds and improved services. This could be a major move in the Indian aviation industry and could open up new opportunities for both SIA and Air India.
The Singapore Airlines stake will come from a new share issue, with the airline acquiring a 25.1 percent stake in the enlarged Air India group. This will also include the transfer of certain assets and liabilities of Air India, including the Jet Airways venture, as part of the deal. As part of the strategic partnership, Singapore Airlines will help to revamp the airline’s fleet, enhance its services, and provide technical and operational advice.
The move is set to boost the presence of Singapore Airlines in the Indian aviation market, which is currently dominated by domestic carriers. SIA has had a presence in India since 2002, and the 25.1 percent stake in Air India will allow the airline to become an even more significant player in the market.
The Air India group is also set to benefit from the tie-up with SIA, as the presence of the latter in the Indian aviation market should help to boost the brand’s global recognition and visibility. This should also help Air India to improve its financial performance, as the Singapore Airlines investment will provide the carrier with additional capital to expand its operations.
The Air India stake acquisition by Singapore Airlines is also expected to be a win for the Indian government, which has been looking to attract more foreign investment into the country’s aviation industry. The government has been pushing the privatization of Air India, and this move by SIA is seen as a major step towards that goal.
