Aerospace
Singapore approves the merger of Vistara and Air India and acquires a 25.1% share.
A major milestone for Air India.
Singapore Airlines (SIA) and Tata Sons (Tata) have agreed to merge Air India and Vistara, with SIA also investing INR 20,585 million (S$360 million, US$250 million) in Air India as part of the transaction. This would give SIA a 25.1% stake in an enlarged Air India group with a significant presence in all key market segments1. SIA and Tata aim to complete the merger by March 2024, subject to regulatory approvals.
SIA intends to fully fund this investment with its internal cash resources, which stood at S$17.5 billion as of 30 September 20222.
SIA and Tata have also agreed to participate in additional capital injections, if required, 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 INR 50,200 million (S$880 million, US$615 million), payable only after the completion of the merger.
The actual amount will depend on factors including the progress of the enlarged Air India’s business plan, and its access to other funding options. SIA intends to fully fund any additional capital injections with its internal cash resources.
Through this transaction, SIA will reinforce its partnership with Tata and immediately acquire a strategic stake in an entity that is four to five times larger in scale compared to Vistara. The merger would bolster SIA’s presence in India, strengthen its multi-hub strategy, and allow it to continue participating directly in a large and fast-growing aviation market.
Mr Goh Choon Phong, Chief Executive Officer, Singapore Airlines, said: “Tata Sons is one of the most established and respected names in India. Our collaboration to set up Vistara in 2013 resulted in a market-leading full-service carrier, which has won many global accolades in a short time.
India is the fastest growing global economy, and is projected to become the third largest in the world by 20273. It is also the world’s third largest aviation market. Demand for air travel is surging with passenger traffic expected to more than double over the next 10 years, supported by rising income levels and ongoing investments in its aviation infrastructure. However, India also remains underserved with low international seats per capita, signifying significant growth potential4 .
Following its acquisition by Tata in January 2022, Air India unveiled a wide-ranging transformation programme to strengthen its foundations and revamp its operations, setting it on the road to recovery and positioning it for growth5.
The combination of Air India and Vistara would bring significant synergies. Air India has valuable slots and air traffic rights at domestic and international airports that are not available to Vistara. With Vistara widely recognised as India’s leading full-service carrier, Air India will benefit from its operational capabilities, customer base, and a strong focus on customer service and product excellence.
Today, Air India (including Air India Express and AirAsia India) and Vistara have a total of 218 widebody and narrowbody 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. It can optimise its route network and resource utilisation, be flexible and agile in capturing demand across market segments, and tap on a larger consumer base to strengthen its loyalty programme.
This would reinforce its position as India’s largest international carrier and second largest domestic carrier, allow it to offer more options and connectivity for business and leisure customers, and enable it to compete as a leading global airline.
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1Today, SIA and Tata hold a 49% and 51% stake in Vistara respectively. Tata wholly owns Air India, which includes the low-cost carriers Air India Express and AirAsia India.
2In addition to its cash and bank balances of S$17.5 billion, the Group retains access to S$2.2 billion of committed lines of credit, all of which remain undrawn. SIA intends to redeem the 2020 Mandatory Convertible Bonds on 8 December 2022, and cash and bank balances will decline by S$3.86 billion on a pro-forma basis on that date.
Aerospace
India is set to build a central command for the Air Traffic Control system, called ISHAN
India’s air traffic growth has led to increased responsibilities for air traffic control. The Airports Authority of India (AAI) is considering centralizing air traffic control for aircraft, dividing the country into four regions. The goal is to consolidate India’s segmented airspace into a single entity to improve air traffic management (ATM) efficiency, safety, and smoothness.
Recently, the AAI invited expressions of interest to develop a detailed project report for the Indian Single Sky Harmonized Air Traffic Management (ISHAN) initiative in Nagpur. Under this plan, air traffic controllers in Nagpur would handle domestic flights flying above 25,000 feet, eliminating the need for coordination among controllers in different regions.
For domestic regional flights operating above 25,000 feet, control would shift to the central command in Nagpur. This consolidation aims to enhance airline operations, increase flight handling capacity, and reduce congestion and flight times for passengers.
Currently, the AAI provides ATM services over Indian airspace and adjoining oceanic areas, covering over 2.8 million square nautical miles. This airspace is divided into four flight information regions (FIRs) in Delhi, Mumbai, Kolkata, and Chennai, along with a sub-FIR in Guwahati.
FIRs are responsible for providing air traffic services, including weather information, visibility, and search and rescue assistance. The proposed unification under the ISHAN initiative aligns with the projected growth of the aviation industry, which anticipates a doubling of domestic passenger traffic by 2030.
Aerospace
Does AirAsia show interest in Comac aircraft in the future?
Tony Fernandes, CEO of Capital A, operating as AirAsia Group, recently paid a visit to the facilities of COMAC on April 2, 2024, and was thoroughly impressed by what he witnessed.
C919 already securing nearly 1000 orders
COMAC, known for its homegrown aircraft, has launched two promising jets: the ARJ21 and the C919 aircraft. Both aircraft are gaining popularity in the Chinese market, with the C919 already securing nearly 1000 orders from various airlines.
Fernandes expressed his admiration for COMAC’s achievements in aircraft manufacturing, acknowledging the immense challenge it entails. His visit underscored the realization that AirAsia now has a viable third option when it comes to selecting aircraft for its fleet.
During his tour, Fernandes was delighted by the innovation and technology evident in COMAC’s aircraft production and the company’s commitment to long-term partnerships.
He noted that many Western companies have shifted away from prioritizing loyalty and customer service, opting instead for short-term gains and a narrow definition of success.
Last month, COMAC embarked on an international tour, showcasing demonstration flights to neighboring countries, particularly Indonesia and Malaysia. Fernandes believes that the positive impression left by COMAC during his visit opens up new opportunities for collaboration.
Fernandes emphasized COMAC’s remarkable achievements
The shared values of loyalty, customer service, and long-term vision align closely with AirAsia’s ethos, making collaboration with COMAC appealing. With a focus on innovation and excellence, both companies stand to benefit from a partnership grounded in trust and a shared commitment to success.
Indonesia and China have already collaborated in validating and maintaining the airworthiness of the ARJ21 aircraft, indicating a solid foundation for future partnerships.
In his statement, Fernandes emphasized COMAC’s remarkable achievements and genuine desire for long-term partnership, highlighting the absence of ego and a genuine willingness to succeed together. He marveled at COMAC’s fully automated, AI-driven factory, a testament to their dedication to innovation and efficiency.
Fernandes criticized Western firms for prioritizing short-term gains over loyalty, customer service, and long-term strategy, emphasizing the importance of understanding customers’ needs and collaborating to achieve success.
Aerospace
Indigo will soon launch Air Taxi Service in India
InterGlobe Enterprises, the parent brand of IndiGo, is set to revolutionize travel in India with its upcoming air taxi service.
Scheduled for a potential launch in 2026, this innovative venture promises a seamless journey for passengers between two bustling hubs. Delhi and Gurgaon in Haryana. The forthcoming service is projected to revolutionize the daily commute, offering passengers a swift aerial journey covering the distance in a mere 7 minutes.
This remarkable efficiency contrasts starkly with the conventional 90-minute drive, underscoring the immense time-saving potential for commuters. The anticipated fare, ranging from Rs 2,000-3,000, makes this innovative mode of transport not only swift but also remarkably competitive in pricing.
At the heart of this ambitious endeavor lies a strategic partnership with Archer Aviation, a pioneer in electric vertical takeoff and landing (eVTOL) aircraft technology. Under this collaboration, Archer will supply 200 state-of-the-art eVTOL aircraft, representing an investment of US$ 1 billion. These cutting-edge aircraft, capable of accommodating up to four passengers alongside the pilot, epitomize the future of sustainable air travel.
Powered by six battery packs, Archer’s eVTOL aircraft boast rapid charging capabilities, enabling a swift turnaround between flights. With a charging time of just 30-40 minutes, these eco-friendly aircraft ensure minimal downtime, maximizing operational efficiency.
Similar services are anticipated to be introduced by the joint venture in Bengaluru and Mumbai as well. Nevertheless, the service rollout period has not yet been made public by the company. Next year, it is anticipated to get its certification. Following this, the company will start the certification procedure with the Directorate General of Civil Aviation (DGCA).
India is set to build a central command for the Air Traffic Control system, called ISHAN
Does AirAsia show interest in Comac aircraft in the future?
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