Singapore Airlines (SIA) on Thursday informed the Singapore Exchange that it was holding discussions with Tata Sons for the merger of Vistara and Air India.
Vistara is a joint venture between Singapore Airlines and Tata Sons in which the former owns 49% stake and the latter 51%.
“SIA is currently in confidential discussions with Tata to explore a potential transaction …the discussions seek to deepen the existing partnership between SIA and Tata, and may include a potential integration of Vistara and Air India,” the airline said in a statement.
It added that the discussions were in line with its “multi-hub” strategy which allows Singapore Airlines access to important markets that complements its strong Singapore hub and that India’s domestic and international traffic flow was expected to double in the next 10 years.
It added however that no definitive terms were agreed upon, and there was no certainty that the transaction will materialise.
Since the government’s sale of Air India and its low-cost international arm Air India Express in January this year, Tata Sons has been working to consolidate all their airline businesses into one group, including its joint venture with AirAsia Berhad in AirAsia India. Earlier this year, the Competition Commission of India approved the proposed acquisition of AirAsia India by Air India. Tata Sons own 83.67% in AirAsia India, and is expected to acquire the remaining stake from AirAsia Berhad.