Antitrust regulator the Competition Commission of India (CCI) said on June 14 that it “approves the acquisition of the entire shareholding in AirAsia India by Air India.”
While Tata Sons currently has a 83.67% shareholding in budget airline AirAsia India, the flag carrier Air India has been a wholly-owned subsidiary of the conglomerate since Tata bought it in January via its vehicle Talace Private Limited in a USD2.4 billion equity-and-debt deal. AirAsia Investment Ltd, part of Malaysia’s Capital A, holds the remaining 16.33% of AirAsia India, and the Malaysian group has hinted since 2020 that it may seek to exit the joint venture.
Tata Sons requested competition authority approval in April to merge the two airlines, proposing that Air India acquire a 100% stake in the low-cost carrier.
“The proposed combination relates to the acquisition of the entire equity share capital of AirAsia India Private Limited by Air India Ltd, an indirect wholly-owned subsidiary of Tata Sons Private Limited,” the CCI notice outlined in its approval. “A detailed order of the commission will follow.”
The move is the first step Tata Sons has taken to consolidate its airline businesses, which also include Vistara, a joint venture with Singapore Airlines.
According to the ch-aviation capacities module, of the total Indian domestic market, which stands at 3,342,724 seats for the week starting June 20, Air India operates 256,592; its low-cost unit Air India Express (which mainly specialises in traffic between India and the Gulf) has a further 6,048, giving them a combined 262,640; while AirAsia India represents 250,146 seats. This means that altogether Air India and AirAsia India take up 15.34% of the market (512,786 seats).
