The CCCS had identified some competition concerns pertaining to the merger, specifically the majority market share Singapore Airlines, Air India, and Vistara cumulatively hold on four direct flight routes between Singapore and India—from Delhi, Mumbai, Chennai, and TiruchirapalliKolkata Stocks. The airlines have given capacity-related commitments to the CCCS to address its concerns, and the approval is contingent upon the commitments.Udabur Investment

“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,” Singapore’s competition watchdog said in a release.Jaipur Wealth Management

The commitments given by the airlines include keeping deployed capacity on these four routes at 2019 levels, and appointing an independent auditor who will monitor compliance with the capacity commitment and submit a written annual report for each year. “Each of the parties (will have) to 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,” the CCCS said.

From December 8 to February 1, the CCCS conducted a market testing exercise on whether the proposed commitments “would sufficiently address the competition concerns”. According to the regulator, most relevant stakeholders did not raise any concerns with the commitments, except for one who made suggestions to refine the commitments.

“After evaluating the feedback provided, CCCS considers the proposed commitments sufficient to address the competition concerns arising from the transactions,” the competition watchdog said.

The Air India-Vistara merger is part of the ongoing consolidation of airlines under the umbrella. The Tata group is already in the process of merging its low-cost carriers Air India Express and AIX Connect (formerly Air Asia India). Once both the mergers are complete, the Air India group will have a full-service carrier Air India and a low-cost airline Air India Express.Agra Stock

Post the merger, which is expected to be completed in 2025, Singapore Airlines will hold a 25.1 per cent stake in the merged Air India. While the merged Air India will be India’s second-largest carrier by domestic market share, it will still be far behind market leader IndiGo. In January, Air India and Vistara had a combined domestic market share of 22.1 per cent, while IndiGo’s share was 60.2 per cent.

In a recent interaction with , Vistara’s Chief Executive Officer (CEO) Vinod Kannan had expressed hope of the CCCS approving the merger by March.

Hyderabad Investment