Singapore Airlines Ltd (SIA) on Thursday said the company is in confidential discussions with Tata Group for a possible merger of Vistara and Air India.

Vistara is a joint venture between Tata Group and Singapore Airlines based in New Delhi. Singapore Airlines holds 49 percent equity in Vistara and the balance 51 percent equity is held by the Tata Group.

The discussions seek to deepen the existing partnership between SIA and the Tata Group and may include a potential integration of Vistara and Air India, the company said in a regulatory filing.

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"The discussions are on-going and no definitive terms have been agreed upon between the parties. There is no certainty or assurance whatsoever that any definitive agreement will be entered into or the potential transaction will materialize or proceed to completion arising from these discussions," the airline said.

Even if a transaction were to materialise, it would be subject to the relevant regulatory approvals, among other things, it added.

Earlier, there were reports that Tata Sons — the controlling entity of Air India, Vistara, and AirAsia India — is looking to merge the three carriers under a unified Air India banner.

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Earlier this year, the Tata Group acquired Air India from the government at a cost of Rs 18,000 crore, and also got the authority to operate Air India Express, a fully-owned low-cost subsidiary of Air India. Apart from this, the Tata Group owns 83.67 percent ownership in AirAsia India and holds 51 percent shares in Vistara.

Experts say to CNBC TV-18 that such a move makes sense from a market-share perspective, As of August, Vistara's market share stood at 9.7 percent while Air India enjoyed an 8.5 percent share. If the two entities were to come together, even if it’s just in some areas, market share would go up substantially.

This will be a big boost for Air India which wants to enjoy at least a 30 percent share of the domestic market in the next five years.

(Edited by : Shoma Bhattacharjee)

First Published:Oct 13, 2022 7:09 PM IST