Following approval from the Indian government, the takeover by Air India of Vistara will go ahead the former will operate the latter's flights from November. According to the deal, the last Vistara-operated flight will take place on 11th November.
Singapore Airlines owns 49% of Vistara in a joint venture with India's Tata Group confirmed it had received approval for foreign direct investment into an expanded Air India from the Indian government. Once completed it would put to bed a merger deal that has been in the making since November 2022.
Singapore Airlines, which is currently the only foreign airline with a direct stake in an Indian carrier, will then hold a 25.1% stake in the combined Air India group in return for a $250 million investment. The deal was agreed in part due to the agreement that the Singaporean airline is due to invest up to 50.2 billion Indian rupees in the group once the merger is completed.
This is a key moment in the development of Singapore Airlines' overseas investments, it was only at the beginning of July that the group got approval from the Competition and Consumer Commission of Singapore (CCCS) for a commercial joint venture deal with Garuda Indonesia.
With this approval, the airlines will be able to deepen their strategic partnership on a wider range of commercial activities that will bring greater benefits to both airlines. These potentially include operating joint revenue-sharing flights between the two countries, coordinating flight schedules to offer travellers more options and seamless connectivity between Singapore and Indonesia and beyond, and exploring joint sales and marketing initiatives that provide greater value to both airlines’ customers.
Since Garuda Indonesia and Singapore Airlines signed an agreement to deepen their partnership in May 2023, the carriers have been working on initiatives including giving GarudaMiles and KrisFlyer members the option to earn and redeem miles on codeshare routes. They have also embarked on joint marketing initiatives to promote tourism activities.
The airlines today codeshare on a wide range of flights, including between Singapore and the Indonesian cities of Bali, Jakarta, Medan, and Surabaya, as well as on long-haul routes between Singapore and Johannesburg, London (Heathrow), and Mumbai.
Mr Irfan Setiaputra, President and Chief Executive Officer, Garuda Indonesia, said: “We are very pleased to receive this approval, as it marks significant progress towards our commitment to enhance service quality as well as broaden both Garuda Indonesia and Singapore Airlines’ networks through a deepening partnership. The joint venture initiative that we are preparing today has been one of the strategies to ensure extensive value creation for our loyal customers. Having regulatory approval as the first step in a commercial agreement will provide more opportunity for developing well-executed strategic ideas.
“Moreover, we hope that this joint venture agreement can provide seamless services for passengers with more flight schedule options and ease in earning and redeeming mileage. Also, this collaboration may deliver concrete action to contribute to boosting Indonesian tourism activities, which will support the post-pandemic economic recovery progress,” Mr Irfan explained.
Mr Goh Choon Phong, Chief Executive Officer, of Singapore Airlines, said: “The robust strategic partnership between Garuda Indonesia and Singapore Airlines has enabled us to broaden our codeshare services over the last few years, offering our customers more choices on flights. With the CCCS’s approval, we are poised to deepen our collaboration across a wider scope of commercial activities. Along with the ongoing work to strengthen the links between our frequent flyer membership programmes, this will provide our customers with even more options and enhanced value. This partnership underscores both airlines’ commitment to improving connectivity between Indonesia and Singapore and beyond, boosting both business and leisure travel, and contributing to economic growth.”