NCLT Approves Air India-Vistara Merger, Creating India’s Largest International Airline

Air India & Vistara Merger
Preeti Bali / 9:10 am / June 10, 2024

The National Company Law Tribunal (NCLT) has cleared the path for the merger of Air India and Vistara, paving the way for the creation of India’s biggest international carrier. This news comes after the initial announcement of the merger in November 2022.

Post-Merger Landscape

Following the successful merger, Singapore Airlines, which currently holds a stake in Vistara, a joint venture with Tata Group, will own 25.1% of the combined entity. This consolidation will result in a formidable airline with a fleet of 218 aircraft, making it India’s largest international carrier and the second-largest domestic carrier, surpassing Air India’s current standing. IndiGo, with its fleet of 350 aircraft, will remain the leader in the domestic market, while American Airlines Group, boasting a massive fleet of 1,521 aircraft, retains the top spot globally.

Approval Process Completed

The NCLT’s Chandigarh bench issued a detailed order (31 pages) sanctioning the “composite scheme of arrangement” that encompasses Talace, Air India, and Vistara, all belonging to the Tata Group. Air India anticipates finalizing the merger by the end of 2024.

A two-member NCLT panel confirmed that the merger proposal had received the necessary approvals from both airlines’ shareholders and creditors. Additionally, the Competition Commission of India (CCI), the Directorate General of Civil Aviation (DGCA), and other relevant authorities, including the Income Tax department, did not raise any major objections.

The NCLT order explicitly grants approval to the “Composite Scheme of Arrangement” as outlined in the Companies Act, 2013, and mandates that the scheme be binding on the involved companies and their shareholders.

Post-Merger Formalities and Timeline

The order outlines a specific timeframe for completing the merger process. Following the receipt of all required approvals and security clearances, Vistara will dissolve without undergoing a formal winding-up process. This dissolution must occur within nine months from the date of the NCLT order.

The order emphasizes that the companies must obtain Foreign Direct Investment (FDI) approval from Singapore Airlines and security clearances from DGCA and the Ministry of Civil Aviation (MOCA) within the stipulated nine-month timeframe.

This approval process has seen progressive steps, with Singapore’s competition regulator (CCCS) granting conditional approval in March 2023, followed by the CCI’s approval with certain conditions in September 2023.

The NCLT’s approval marks a significant milestone in the consolidation plan, following Tata Group’s acquisition of Air India in January 2022. This merger is expected to create a stronger airline entity in the Indian aviation sector.


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