Singapore Airlines Acquires Stake In Air India Group

Singapore Airlines (SIA) and Tata Sons (Tata) have agreed to invest an additional SGD 360 million (USD 267 million) in Air India.

Following Tata's takeover of Air India and merger with Vistara Airlines, Singapore Airlines will own 25.1% of the enlarged Air India group.

One of the key strategic initiatives for future growth mentioned in the quarterly financial report is the November 2022 deal between Singapore Airlines and Tata Sons to inject another USD 267 million into Air India. Regulatory approval is still required for this agreement.

According to SIA's statement, "The merged entity will be four to five times larger in scale compared to Vistara and mark a strong presence in all key airline segments in India. The proposed merger will bolster SIA's presence in India, strengthen its multi-hub strategy, and allow it to continue participating directly in this large and fast-growing aviation market."

The airline went on to say, "Deeper collaboration with like-minded airlines is an integral part of the SIA Group's partnerships strategy. This enables SIA and its partners to drive more traffic to their hubs, offer more options to customers, and increase the Group's global footprint."

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It is worth noting that Singapore Airlines (SIA) reported a net profit of SGD 85 million (USD 62.8 million) for the third fiscal quarter that ended in December 2021, for the first time since the outbreak of the COVID-19 pandemic.

According to SIA's third-quarter business update for Fiscal Year 2021-22, the airlines carried approximately 1.1 million passengers during the quarter, more than five times the number from the previous year and more than double that of the second quarter of FY 2021-22. Passenger capacity increased as the number of flights increased in response to the demand. It added that by the end of the quarter, passenger capacity had reached 45 percent of pre-COVID levels.

Despite significant increases in both passenger and cargo revenues to SGD2,316 million in the same quarter last year, profit increased by more than 117% to SGD1,249 million (USD925 million). Notably, profit from travellers increased by 355.2% to SGD 833 million, owing to a 556.8% increase in traffic (measured by revenue-passenger kilometres) that outpaced capacity expansion, resulting in a passenger load factor of 33.2%, an increase of 18.9 percentage points.

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