In a bid to amalgamate the airline entities owned by Tata Sons, the Competition Commission of India on Tuesday approved Air India’s proposal to acquire the entire stake in low-cost subsidiary AirAsia India.
“The proposed combination envisages acquisition of the entire equity share capital of AirAsia (India) Private Limited (Air Asia India) by Air India Limited (AIL), an indirect wholly owned subsidiary of Tata Sons Private Limited (TSPL). The equity share capital of AirAsia India in India is 83.67 per cent,” CCI said in a press statement.
AirAsia India was established in 2014 as a joint venture between Tata Sons and Malaysia-based AirAsia Berhad, with Tata increasing its stake to 83.67% in December 2020. The airline does not have the authority to operate international flights. Air India and AirAsia India have a combined domestic market share of 13%.
The approval comes nearly six months after the government transferred the ownership of Air India and Air India Express to Tata Sons.
Tata Sons owns four airlines – Air India, Air India Express, AirAsia India and Singapore Airlines, with a 51% stake in the joint venture with Vistara. Air India Express does not have domestic flights, and the remaining three have a domestic market share of 21%.
The integration of Vistara’s business with Air India is likely to take time as talks are still on with Singapore Airlines.
Meanwhile, Singapore’s Competition and Consumer Commission expressed concern over the recent acquisition of Air India by Tata as three related entities – Singapore Airlines, Tata Sons and Vistara – have “overlapping passengers” between India and the city state. routes”, adding that it needs to “assess further” whether there was substantial competition from other unrelated airlines such as IndiGo.