NCLT Approves Merger of Air India and Vistara, Creating Aviation Giant

The National Company Law Tribunal (NCLT) has officially sanctioned the merger between Air India and Vistara, marking a significant milestone in the aviation sector. This approval, granted by the Chandigarh bench of the NCLT, sets the stage for the formation of one of the world's largest airline conglomerates. The merger, initially announced in November 2022, sees Singapore Airlines securing a 25.1 per cent stake in the merged entity. Vistara, prior to this merger, was a collaborative venture between Singapore Airlines and Tata Group.

In a detailed 31-page order, the NCLT outlined the composite scheme of arrangement involving Talace, Air India, and Vistara—all entities under the Tata Group umbrella. The merger is anticipated to reach completion by the end of this year. The NCLT's two-member bench highlighted that the merger had garnered all necessary consents from shareholders and creditors of both airlines. Additionally, it received endorsements from regulatory bodies including the Competition Commission of India (CCI) and the Directorate General of Civil Aviation (DGCA), with no significant objections from the Income Tax department or any other concerned parties.

The NCLT's order further clarified that upon completion of merger formalities and receipt of requisite approvals, including Foreign Direct Investment (FDI) and security clearances as mandated under Civil Aviation Regulations (CARs), Vistara would be dissolved without undergoing winding up procedures. The sanctioned scheme, as per the tribunal's directive, will be obligatory for both companies and their shareholders.

For FDI approval and security clearances, Singapore Airlines—a shareholder in Vistara—along with DGCA/MOCA (Ministry of Civil Aviation), are to ensure compliance within nine months from the date of the order. Earlier in March, Singapore's competition regulator, CCCS, conditionally approved the proposed merger. Subsequently, in September 2023, CCI also greenlit the deal under specific conditions.

This merger comes after Tata Group's acquisition of Air India in January 2022, taking over the reins of the then loss-making airline. The consolidation under Tata Group's leadership is poised to create a formidable presence in the global aviation market.