Singapore Airlines open to Air India-Vistara synergies post Tata deal

The Tata Group, which is bidding for state-owned Air India, has convinced Singapore Airlines (SIA) to integrate the carrier’s services into the schedule of their joint venture Vistara if it’s successful, said people with knowledge of the matter.

This they said was significant as SIA had turned down the opportunity to join Tata in the Air India bid and had been unenthusiastic about its joint venture partner’s plan to acquire the ailing state-run national carrier as such a move might prove a distraction.

The deadline for the submission of financial bids for the Air India privatisation is Wednesday.


Seamless Passenger Transfers
“Vistara and AI will be two carriers that will work with each other in terms of integrating their flight network both internationally and in the domestic sector. SIA, however, will not be part of the AI bid,” said a person aware of the development. Vistara is a 51:49 joint venture between the Tata group and SIA. Vistara-AI integration would see passengers transferring seamlessly between each other’s flight networks.

Tata plans to bid for Air India through an aviation holding company. If the bid is successful, Vistara and Air India will be the two airlines in the Tata holding company. In such an event, AirAsia India, a joint venture of Tata with AirAsia Bhd, is likely to be merged with Air India Express, the low-cost arm of Air India that operates short-haul international flights. “AirAsia India will soon become a Tata group company and that has been agreed upon by the promoters. Also, AirAsia India will not operate in its current form if the Tata group gets Air India,” said another person, on condition of anonymity. The Tatas currently own 83.7% of AirAsia India; the rest is held by AirAsia Bhd through a subsidiary.

Tata group didn’t respond to queries. SIA declined to comment. “We do not comment on any confidential discussions that we may or may not be having with our partners,” SIA said in an email. Tata group, through its holding company, and SpiceJet cofounder Ajay Singh--in his personal capacity-- are likely to submit bids for Air India by the deadline. The Tata group is the frontrunner, according to people aware of the matter.