SIA said it intends to fully fund this investment with its internal cash resources, which stood at S$17.5 billion (Singapore dollars) as of September 30, 2022.
SIA and Tata have also agreed to participate in additional capital injection to fund the growth and operations of the enlarged Air India in FY2022-23 and FY2023-24.
Based on SIA'S 25.1% stake post-completion, its share of any additional capital injection could be up to US$615 million, payable only after completion of the merger. Tata Sons chairman N Chandrasekaran said: "The merger of TATA SIA Airlines Ltd and Air India is an important milestone in our journey to make Air India a truly world-class airline. We are transforming Air India, with the aim of providing a great customer experience, every time, for every customer."
Chandrasekaran further noted that as part of the transformation, Air India is focusing on growing both its network and fleet, revamping its customer proposition, enhancing safety, reliability, and on-time performance.
"We are excited with the opportunity of creating a strong Air India which would offer both full-service and low-cost services across domestic and international routes. We would like to thank Singapore Airlines for their continued partnership," he added.
SIA CEO said: "Tata Sons is one of the most established and respected names in India. Our collaboration to set up SIA Airlines in 2013 resulted in a market-leading full-service carrier, which has won many global accolades in a short time. With this merger, we have an opportunity to deepen our relationship with Tata and participate directly in an exciting new growth phase in India's aviation market."
The SIA CEO also said that "both airlines will work together to support Air India's transformation program, unlock its significant potential, and restore it to its position as a leading airline on the global stage."Air India (including Air India Express and AirAsia India) and SIA Airlines have a total of 218 wide body and narrow body aircraft, serving 38 international and 52 domestic destinations.With the integration, Air India will be the only Indian airline group to operate both full-service and low-cost passenger services.
Sharing his excitement over this new journey, SIA Airlines CEO Vinod Kennan said: At SIA Airlines, take immense pride in embarking on this journey. SIA Airlines is a fine manifestation of its parent brands Tata Sons and Singapore Airlines, and we are delighted that we will continue to be guided by their legacies as we merge with Air India.
He further said that Air India is a legendary brand with a rich legacy that pioneered civil aviation in India,and there is enormous potential for an airline group with the scale and network of the combined entity.
"We look forward to providing more opportunities for our customers, employees and partners, while putting a spotlight on Indian aviation on the global stage. The integration process will take some time, and during this phase it will be bulkiness as usual for all our stakeholders including customers. We will continue to share relevant information with all of them, as appropriate," he added.
The Tata Group had taken over Air India and Al Express this January SIA Airlines, in which Tata have 51% stake and SIA 49%, and Al are the two full service carriers (FSC) in Tata fold. Al Express and AAIPL are the two group Low-cost carriers (LCC).
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