Singapore Airlines receives 25.1% stake in Air India group
Singapore Airlines will give Air India an additional SGD 360 million (USD 267 million). With its acquisition by Tata and merger with Vistara Airlines, it will give SIA a 25.1% interest in the firm. Through this deal, SIA will strengthen its relationship with Tata and gain an instant strategic position in a company that is four to five times bigger than Vistara in terms of size.
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Singapore Airlines receives 25.1% stake in Air India group: Key Points
● Last year, Tata and Singapore Airlines both committed to provide additional funding if necessary to assist Air India reach its previous peak, when the airline had a glitzier shine, and sustain it.
● Once the brands are amalgamated, Singapore Airlines will own a quarter of a company that will have 218 aircraft and have access to high-paying parking and landing slots all over the world.
● According to the airline, the new organisation will be four to five times bigger than Vistara and support the development of its multi-hub plan.
● Flyers can travel with Vistara, a full-service airline, to 12 foreign locations, including London, Frankfurt, Paris, Abu Dhabi, and Dubai.
Aim of Tata and Singapore Airlines:
● Tata and Singapore Airlines have a long history together, including an ambitious plan to launch an airline with 100 planes in 1994.
● However, because the government forbade a foreign competitor, the plan was shelved. When the government invited bids for a stake in Air India in 2000, the two paired together once more. Political resistance ultimately forced the cancellation of the scheme.
● One of the important strategic objectives for future growth stated in the quarterly financial report is the November 2022 agreement between Singapore Airlines and Tata Sons to further contribute $267 million into Air India.
● The combined company will be four to five times larger in scale than Vistara and will have a significant presence across all of India’s major airline markets.
Vistara Brand To Be Discontinued With Air India Merger
Profit of the Airlines:
● Singapore Airlines Ltd. (SIA) announced a third-quarter net profit increase of more than seven times.
● The airline’s net profit increased significantly from S$85 million a year earlier to S$628 million ($469 million) during the three months that ended on December 31.
● A record SGD 4,846 million ($3,589 million) in revenue was earned by SIA for the three months that ended in December, a rise of SGD 358 million ($265 million), or 8% from the previous quarter.
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