India’s Tata Group has been working towards an integration of its various airline entities towards making one big aviation behemoth in Talace Ltd, which is the entity it promoted to acquire Air India. While Air India still does not have a CEO and Campbell Wilson is expected to take charge soon, Air India moved to start the integration of its majority-owned no-frills carrier AirAsia India with the bigger, Air India.
In April 2022, Air India filed a request with the Competition Commission of India (CCI), India’s anti-trust regulator, to acquire its entire shareholding in AirAsia India. Previously, the Tata Group had hiked their stake in AirAsia India to 83.67% in December 2020, leaving AirAsia Berhad with the remaining stake. The conglomerate is on track to complete the acquisition of the remaining stake from AirAsia within 2022.
The request filed on behalf of Air India has now been approved by the CCI. In a statement issued by the CCI, it said, “The proposed combination envisages the acquisition of the entire equity share capital of AirAsia (India) Private Limited (Air Asia India) by Air India Ltd. (AIL), an indirect wholly-owned subsidiary of TSPL. At present, TSPL holds 83.67% of the equity share capital of Air Asia India.”
The Tata Group has recently been on a drive to maximise cooperation between the aviation entities it owns and operates. Previously, after the acquisition of Air India, the airline signed up for IRROPs cooperation with both AirAsia India and Vistara. The Group plans to have AI, which it took over this January, as its flagship carrier and merge the no-frills carriers AirAsia India and AI Express into it. In a separate project, Tatas have moved forward to bring all its airlines under a single roof in Delhi suburbs, Gurugram. The group is expected to lease up to 700,000 feet shortly to initiate this move.
Vistara, Tata’s Joint Venture with Singapore Airlines, will continue as a separate carrier for now along with AI. Various media have reported that the Tata Group has given Singapore Airlines time to think about its involvement with the privatised Air India.
The path of completion of this transaction, however, is unclear at the moment. Air India could just acquire 100% of the share capital from Tata Sons as well as AirAsia India to operate AirAsia as a subsidiary for the time being. Alternatively, it could begin a direct merger into its own operations of the AirAsia India A320 fleet. In the former case, the newly acquired airline could operate via codeshares and offer the same service standards of Air India. In the latter case, its own Air Operators Permit would cease to exist, and for a while, Air India would have to operate aircraft that won’t carry its livery.
Ajay Awtaney is the Founder and Editor of Live From A Lounge (LFAL), a pioneering digital platform renowned for publishing news and views about aviation, hotels, passenger experience, loyalty programs, travel trends and frequent travel tips for the Global Indian. He is considered the Indian authority on business travel, luxury travel, frequent flyer miles, loyalty credit cards and travel for Indians around the globe.