Singapore Airlines (SIA) said on Thursday, October 13,  it was in talks with Tata Group about a potential merger of Vistara, their joint venture airline, with Air India to give the Singaporean carrier a bigger foothold in South Asia. “The discussions seek to deepen the existing partnership between SIA and Tatas, and may include a potential integration of Vistara and Air India,” SIA said.

It said no definitive terms had been agreed on a deal that would form a more formidable competitor to the country’s dominant airline IndiGo and Middle-Eastern rivals that carry a large share of India’s international traffic. SIA said India had strong domestic and international traffic flows that were expected to double over the next 10 years, which compares to its more mature home market.

The Singporean carrier has a 49% stake in Tata SIA Airlines, which operates full-service carrier Vistara, while the Indian conglomerate owns the rest. Tata owns all of Air India after completing its purchase of the previously state-owned Indian national carrier in January.

SIA, which was focused on repairing its balance sheet, did not take part in the bidding process, but Campbell Wilson, a former senior executive at the Singaporean carrier, started as Air India’s new chief executive in July.

The Indian airline is rebuilding its fleet and targeting a domestic market share of at least 30% over the next five years as it looks to repair its reputation after years of losses.

It is also launching more services to North America, where its use of Russian airspace gives it a shorter flight time than rivals that have avoided it since Moscow began its invasion of Ukraine in February. “SIA converting its stake in Vistara into a stake for the Tata-led airline group makes sense,” said Brendan Sobie, an independent analyst based in Singapore. “The creation of this group will improve the position of all the Tata airlines and SIA’s investment in the Indian market.” Air India and Tatas, which also controls low-cost carrier AirAsia India, did not immediately respond to requests for comment.               Source: Reuters