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NEW DELHI: The Competition and Consumer Commission of Singapore (CCCS) has granted conditional approval for merging Vistara — which is owned 49% by Singapore Airlines (SIA) — into. SIA will hold 25.1% stake in the merged AI with Tatas having the remaining stake.
The CCCS “identified some competition concerns” in this transaction, especially as these airlines have a significant number of flights between Delhi, Mumbai, Chennai and Tiruchirapalli on the Indian side and Singapore on the other.“Even though a number of competing airlines provide air passenger transport services on these routes, the parties have sustained substantial market share in recent years. CCCS also found that the price and capacity coordination between the parties arising from the confluence of the transactions would significantly restrict competition on the affected routes,” the regulator said in a statement.
This concern was allayed by the airlines in the transaction assuring they will “maintain capacity” on these four routes at pre-Covid (2019) levels. “The parties… (will) appoint an independent auditor to monitor compliance (of this commitment) and submit a written annual report for each report year; and each of the parties (will) submit an interim report which monitors their respective compliance with the committed capacity levels for every three weeks of non-fulfilment in a report year.”
In a statement, SIA said “welcomed CCCS approval of the merger of AI and Vistara. The proposed merger is in progress, pending foreign direct investment and other regulatory approvals.”
Among the key remaining nods for the two airline merges that are taking place — AI & Vistara and AI Express and erstwhile AirAsia India — is that of NCLT. It will take about nine months after getting that approval for the merger to be completed, say people in the know.
The CCCS “identified some competition concerns” in this transaction, especially as these airlines have a significant number of flights between Delhi, Mumbai, Chennai and Tiruchirapalli on the Indian side and Singapore on the other.“Even though a number of competing airlines provide air passenger transport services on these routes, the parties have sustained substantial market share in recent years. CCCS also found that the price and capacity coordination between the parties arising from the confluence of the transactions would significantly restrict competition on the affected routes,” the regulator said in a statement.
This concern was allayed by the airlines in the transaction assuring they will “maintain capacity” on these four routes at pre-Covid (2019) levels. “The parties… (will) appoint an independent auditor to monitor compliance (of this commitment) and submit a written annual report for each report year; and each of the parties (will) submit an interim report which monitors their respective compliance with the committed capacity levels for every three weeks of non-fulfilment in a report year.”
In a statement, SIA said “welcomed CCCS approval of the merger of AI and Vistara. The proposed merger is in progress, pending foreign direct investment and other regulatory approvals.”
Among the key remaining nods for the two airline merges that are taking place — AI & Vistara and AI Express and erstwhile AirAsia India — is that of NCLT. It will take about nine months after getting that approval for the merger to be completed, say people in the know.
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