Vistara Merger: CCI approves the merger of Air India-Vistara, this is the plan to protect from competition

Air India and Singapore Airlines will ensure minimum capacity on various domestic and international air routes including Delhi-Sydney and Delhi-Paris. The Competition Commission of India (CCI) on September 1 approved the proposed merger of Vistara with Air India, in which Singapore Airlines will also acquire 25.1 per cent stake in Air India. The regulator has raised certain competition concerns regarding the proposed merger and to address them, the airlines have made certain commitments regarding the merger. As per the commitments, Air India has voluntarily offered to maintain “minimum capacity/supply levels” on certain overlapping O&D (origin and destinations) on domestic and foreign routes.

According to the 73-page CCI order, the domestic segment includes Bhubaneswar-Delhi, Bengaluru-Guwahati, Cochin-Delhi, Delhi-Thiruvananthapuram, Amritsar-Delhi, Bhubaneswar-Mumbai and Bengaluru-Delhi. The international routes on which Air India will maintain minimum capacity/delivery levels include Delhi-Sydney, Delhi-Melbourne, Delhi-Paris and Delhi-Frankfurt. Both Air India and Vistara operate flights on these domestic and international routes. Additionally, Air India and Singapore Airlines will maintain minimum capacity/supply levels in respect of certain overlapping O&D pairs between India and Singapore – Delhi-Singapore, Mumbai-Singapore, Tiruchirappalli-Singapore and Chennai-Singapore.

In an order issued on September 1, the Commission said that the voluntary capacity commitments proposed by the parties appear to address potential competition concerns and therefore it has decided not to proceed with the investigation in the matter. The merger deal will mark a major consolidation in India’s fast-growing aviation sector. Following completion of the merger, Singapore Airlines will be allotted additional shares in the merged entity through preferential allotment. With this deal, Air India will become the country’s largest international airline and second largest domestic airline. The merger of Air India Express and AIX Connect (formerly known as AirAsia India) is underway. The four airlines of the Tata group are Air India, Air India Express, AIX Connect and Vistara, in which Singapore Airlines holds 73 percent stake.