The latest airline merger looks like it’s a win-win. On Tuesday Singapore Airlines and Indian conglomerate Tata agreed to merge their nine-year-old jointly owned carrier Vistara with Air India, whose enterprise was valued at $2.4 billion when Tata bought it just over a year ago.
involves the Lion City’s $12 billion flag carrier receiving 25.1% of the enlarged business in exchange for its 49% interest in Vistara and $250 million. It will give the company run by Goh Choon Phong a strategic stake as a bigger player in the world’s third-largest aviation market.
Air India, meanwhile, will get a deep-pocketed partner willing to inject as much as $615 million more in capital over the next couple of years, if needed. Singapore Airlines’ ability to finance the deal with cash speaks volumes about its strong financial position. That’s in part, of course, thanks to a $13 billion government bailout in 2020, as well as Singapore’s comparatively quick relaxation of inbound quarantine restrictions.
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