Singapore Airlines Ltd (SIA) said on Tuesday it would emerge as a 25.1% owner of Air India as part of a deal that would merge its Vistara full-service airline joint venture with Tata Sons into India’s national carrier.

SIA will invest $250 million into Air India as part of the transaction, the Singaporean carrier said in a statement, with the pair aiming to complete the merger by March 2024 subject to regulatory approvals.

The agreement will create a stronger rival to the country’s dominant carrier IndiGo and give the Singaporean airline, which lacks a domestic flying market, a more solid foothold in one of the world’s fastest-growing aviation markets.

It will also allow the Indian conglomerate to consolidate its brands around full-service Air India and low-cost Air India Express, which is being merged with AirAsia India after Tata bought out former partner AirAsia.

SIA has a 49% stake in Tata SIA Airlines, which operates Vistara, while the Indian conglomerate owns the rest.

SIA said it and Tata had agreed to participate in additional capital injections in Air India if required to fund growth and operations over the next two financial years.

SIA could spend up to $615 million based on its 25.1% post-completion stake, payable after the completion of the merger, it said, adding it would fund the growth plans through its internal cash resources.

“We will work together to support Air India’s transformation programme, unlock its significant potential, and restore it to its position as a leading airline on the global stage,” SIA Chief Executive Goh Choon Phong said.

Tata Sons Chairman Natarajan Chandrasekaran said in the SIA statement that his company was excited to create a stronger Air India in partnership with the Singaporean carrier.

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