Air India, which is a wholly-owned subsidiary of Tata Sons, has received the antitrust regulator’s approval to entire shareholding in no-frills carrier AirAsia India. Tata Sons, the investment-holding company of all Tata Group firms, holds an 83.67% stake in AirAsia India.
This comes ahead of Tata group’s plans to turnaround debt-laden Air India, which it took over in January this year, even as the salt-to-software conglomerate inches a step closer to bringing all its aviation businesses under one umbrella.
On Tuesday, Competition Commission of India (CCI) approved Air India’s plans to acquire the remaining 16.33% stake held by its joint venture partner Malaysia’s AirAsia Group. “CCI approves acquisition of the entire shareholding in AirAsia India by Air India, a wholly-owned subsidiary of Tata Sons,” the antitrust panel said.
Air India, which along with its wholly-owned subsidiary Air India Express operates domestic and international passenger services, air cargo and charter services in India, had sought CCI’s approvals in April this year. “The proposed combination relates to the acquisition of the entire equity share capital of AirAsia (India) by Air India (AIL), an indirect wholly-owned subsidiary of Tata Sons,” Tata Group said in its April notice filed with CCI.
“The proposed combination will not lead to any change in the competitive landscape or cause any appreciable adverse effect on competition in India, irrespective of the manner in which the relevant markets are defined,” it said, adding, following the deal, the combined entities would hold a 15.7% share in domestic passenger market.
Further details of the combination — such as financials, share swap and dateline — were not disclosed.
The carriers have overlapping verticals at Bengaluru, Hyderabad, Delhi, Thiruvananthapuram and Mangaluru airports.
AirAsia India, which operates under the brand name ‘AirAsia’, provides domestic scheduled passenger services, air cargo services and charter flight services in India. AirAsia India does not provide scheduled passenger services on international routes. Air India’s subsidiary Air India Express does have domestic services and only operates on the India-Gulf route.
Tata Group is also in the process of bringing all its airline ventures – Air India, Air India Express, Vistara, AirAsia India and AI SATS (ground handling firm) – under one roof. Tatas hold a 51% stake in Vistara and the remaining 49% is held by joint venture firm Singapore Airlines.
Tata Sons, through a wholly-owned subsidiary Talace had taken control of Air India in January this year, following a strategic disinvestment by the Government. Tata Group, India’s largest business conglomerate, was named the winning bidder for the ailing Air India in October 2021, after Tata Sons through Talace submitted a bid of Rs 18,000 crore.
Later in May, Air India appointed aviation industry veteran Campbell Wilson as its CEO and MD, months after former Turkish Airlines chairman Ilker Ayci declined the position. Prior to which in March, Tata Sons appointed N Chandrasekaran as the chairman of Air India as the group needs to iron-out a number of issues of the carrier following its divestment. As chairman of Tata Sons, Chandrasekaran also heads the group’s nearly 100 operating companies, including Tata Consultancy Services, Tata Motors, Tata Steel and Tata Power, among others.