5 March 2024

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1. The Competition and Consumer Commission of Singapore (“CCCS”) has granted conditional approval of the following transactions (collectively, the “Transactions”) after accepting commitments from Air India Limited (“Air India”), Singapore Airlines Ltd (“SIA”) and Tata SIA Airlines Ltd (which operates under the brand name “Vistara”) (collectively, the “Parties”):

a) Talace Private Limited’s (“Talace’s”) acquisition of all shares and voting rights of Air India from the Government of India, along with Air India’s shareholding interest of 100% in the equity share capital of Air India Express Limited and 50% in the equity share capital of Air India SATS Airport Services Private Limited (the “First Transaction”);

b) the subsequent agreement between Air India, Talace, Tata Sons Private Limited (“TSPL”), Vistara and SIA dated 29 November 2022 (the “Implementation Agreement”) resulting in: (i) the merger of each of Talace and Vistara into Air India, with Air India as the surviving entity (the “Integrated Entity”); and (ii) SIA acquiring 25.1% of the enlarged equity capital of Air India (the “Second Transaction”); and

c) the proposed commercial cooperation between the Integrated Entity and SIA contemplated by the agreement dated 29 November 2022 between TSPL, SIA and Air India, and to be given effect to through a new framework agreement, reflecting SIA’s and the Integrated Entity’s cooperation in the provision of scheduled air passenger transport services between Singapore and India (“Revised Commercial Cooperation”).

Background

2. On 30 November 2020, CCCS received a joint application for decision from SIA and Vistara as to whether the proposed commercial cooperation framework between SIA and Vistara in the provision of scheduled air passenger transport services between India and Singapore (the “Proposed Commercial Cooperation”) would infringe section 34 of the Competition Act 2004 (the “Act”).^[1]

3. On 14 December 2021, Talace notified the First Transaction to the CCCS. On 3 June 2022, CCCS completed its Phase 1 review and raised competition concerns with Talace based on information received from Talace and third parties.^[2] Subsequently, on 29 November 2022, Air India, Talace, TSPL, SIA and Vistara entered into the Second Transaction, which would result in, inter alia, the formation of the Integrated Entity. The Integrated Entity would replace Vistara as the countersigning party to the Proposed Commercial Cooperation with SIA via the Revised Commercial Cooperation.

4. Taking into consideration information submitted by the Parties and third-party feedback, CCCS has identified some competition concerns in assessing the Transactions. In particular, the Parties possess the majority of the market shares for the carriers offering direct flights on four routes of concern, namely Singapore and New Delhi (and vice versa) (“SIN-DELvv”), Singapore and Mumbai (and vice versa) (“SIN-BOMvv”), Singapore and Chennai (and vice versa) (“SIN-MAAvv”), and Singapore and Tiruchirapalli (and vice versa) (“SIN-TRZvv”). 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.

Commitments by Parties

5. To address CCCS’ competition concerns, the Parties proposed three (3) sets of commitments (the “Proposed Commitments”) as follows:

a) commitments by Air India and Vistara^[3] in relation to the First Transaction (the “First Transaction Commitments”);

b) commitments by the Integrated Entity and SIA in relation to the Second Transaction (the “Second Transaction Commitments”); and

c) commitments by the Integrated Entity and SIA in relation to the Revised Commercial Cooperation (the “RCC Commitments”).

6. The Proposed Commitments pertain to scheduled air passenger transport services on the SIN-DELvv, SIN-BOMvv, SIN-MAAvv and SIN-TRZvv routes where the Parties will undertake the following:

a) Maintain capacity on the SIN-DELvv, SIN-BOMvv, SIN-MAAvv and SIN-TRZvv routes at pre-COVID-19 (i.e. Calendar Year 2019) levels;

b) Appoint an independent auditor to monitor compliance with (a) and submit a written annual report for each report year; and

c) Each of the Parties 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.

7. For further details of the Proposed Commitments, please refer to Annex A.

CCCS’s Assessment of the Parties Commitments

8. From 8 December 2023 to 1 February 2024, CCCS conducted a market testing exercise on whether the Proposed Commitments would sufficiently address the competition concerns arising from the Transactions. Most relevant stakeholders did not raise any concerns with the Proposed Commitments save for one who made suggestions to refine the Proposed Commitments.

9. After evaluating the feedback provided, CCCS considers the Proposed Commitments sufficient to address the competition concerns arising from the Transactions.

Conclusion

10. CCCS has approved the Transactions on 5 March 2024, subject to the Parties’ adherence to the Proposed Commitments.

11. More information can be accessed from the CCCS website at www.cccs.gov.sg under the section “Public Consultation”.

12. For more information on the merger review process in Singapore, please refer to Annex B.

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