New Delhi, Sep 1 (IANS): The Competition Commission of India (CCI) granted approval on Friday for the merger between Tata Group's airlines - Vistara and Air India.

This significant development opens the door for Air India to potentially become India's largest international carrier and the second-largest domestic carrier, trailing only IndiGo.

This decision follows several months of scrutiny, during which the CCI had issued a show cause notice to Air India back in June, seeking clarification on why the proposed merger with Vistara should not be subject to investigation due to concerns regarding competition within the aviation sector.

"C-2023/04/1022 CCI approves the merger of Tata SIA Airlines into Air India, and acquisition of certain shareholding by Singapore Airlines in Air India subject to compliance of voluntary commitments offered by the parties," the regulator said in a tweet on X (formerly known as Twitter) on Friday evening.

Vistara and Air India, both full-service airlines under the Tata Group, have a significant connection.

Singapore Airlines (SIA) has a 49 percent ownership stake in Vistara. Under this agreement, SIA is set to invest Rs 2,059 crore into the increased share capital of Air India, securing a 25.1 per cent stake in the company. The remaining majority stake of 74.9 percent will be held by Tata Sons in the newly-formed entity.