Vistara was set up in 2013, with Tata and SIA holding 51% and 49%, respectively. Still, the airline has not been profitable partly because of a lack of scale. National carrier Air India is deeply in the red, with some $2 billion in losses in the last financial year. Tata took over the airline early this year from the Indian government for US$2.4 billion ($3.2 billion).
Singapore Airlines (SIA) is making a big move in India that will see it take a quarter stake in the loss-making Air India. However, analysts are optimistic about the prospects this enlarged footprint will bring to the airline, which has worked up an appetite for new growth after recovering sharply from the pandemic.
The market had seemingly concurred, with SIA shares up 1.65% to close at $5.55 on Dec 1 from the market close on Nov 29, when SIA announced that Vistara — its joint venture airline in India — will merge with Air India, owned by the same joint venture partner the Tata Group.
