Singapore Airlines has received approval from the Indian government to proceed with its merger with Air India, a key step towards completing a deal to create one of the world’s largest airline groups.

First announced in November 2022, the deal will see Singapore Airlines acquire a 25.1 per cent stake in the Indian flag carrier.

Vistara, a full-service carrier jointly owned by India’s Tata Group and Singapore Airlines, will be absorbed into Air India as part of the deal and cease operating its own flights from 12 November. Air India is also owned by the Tata Group.

Singapore Airlines said its acquisition of a quarter of Air India was approved by India’s government under foreign direct investment (FDI) laws, which regulate investment in India-based businesses from the rest of the world. The merger had alredy been approved by competition authorities in both Singapore and India.

“The FDI approval, together with anti-trust and merger control clearances and approvals, as well as other governmental and regulatory approvals received to-date, represent a significant development towards the completion of the proposed merger,” Singapore Airlines said in the filing to the Singapore Stock Exchange on Friday.

“SIA will make the necessary announcement(s) upon completion of the proposed merger or in the event that there are other significant developments,” the filing said on Friday.

In September last year, the Competition Commission of India said: “CCI approves the merger of Tata SIA Airlines into Air India and acquisition of certain shareholding by Singapore Airlines (SIA) in Air India subject to compliance of voluntary commitments offered by the parties.”

The parties are discussing an extension to the merger’s long stop date, which was initially set for 31 October 2024.

The Tata Group re-entered the Indian airline market in 2013 with the launch of Vistara and AirAsia India. In January 2022, the Tata Group also acquired Air India and Air India Express.

The merger will allow Singapore Airlines greater access to the Indian aviation market – a high-growth sector in India.

On X, Vistara shared a note, saying: “We are merging with Air India for you to fly #ToLimitlessPossibilities! Vistara flights, starting 3-Sep-24, will progressively not be available for bookings for travel after 11-Nov-24.”

It said that “12-Nov-24 onwards, you will be required to book with Air India. Stay tuned for further updates.”