Tata Sons has asked for antitrust approval to merge one of its airlines, AirAsia India (Bengaluru International), into another, Air India (AI, Delhi International), proposing that the flag carrier acquire a 100% stake in the low-cost carrier, the Press Trust of India news agency reported having viewed the conglomerate’s application.
Tata bought a 100% shareholding in state-run Air India in January through its vehicle Talace Private Limited in a USD2.4 billion equity-and-debt deal. It currently has an 83.67% stake in AirAsia India, with AirAsia Investment Ltd, part of Malaysia’s Capital A (formerly AirAsia Group), holding the remaining 16.33%.
Local media had been speculating since last year that it was most likely to merge AirAsia India into another budget carrier, Air India Express (IX, Delhi International), which the group acquired together with Air India.
“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,” said the notice filed with the Competition Commission of India on April 27. “The proposed combination will not lead to any change in the competitive landscape or cause any appreciable adverse effect on competition in India.”
The move is the first step Tata Sons has taken to consolidate its airline businesses, which also include Vistara (Delhi International), a joint venture with Singapore Airlines.
AirAsia India, which commenced operations in June 2014, does not have international operations but had reportedly been closing in on obtaining international flying rights. Meanwhile, Air India has lucrative landing slots around the world but possesses an ageing fleet as well as poor service levels and financials.
According to the ch-aviation fleets module, AirAsia India currently operates a fleet of twenty-eight A320-200s (average age 11.9 years) and five new A320-200Ns, and is awaiting delivery of eight A321-200NXs.
Air India operates a varied fleet of 124 aircraft, namely twenty-one A319-100s (average age 13.8 years), nine A320-200s (average age 9.2 years), twenty-seven A320-200Ns (average age 4.3 years), twenty A321-200s (average age 13.5 years), four B747-400s (average age 26.9 years), three B777-200(LR)s (average age 12.8 years), thirteen B777-300ERs (average age 12.5 years), and twenty-seven B787-8s (average age 7.8 years). The flag carrier has reportedly been in talks with Airbus, Boeing, and lessors about a potential order for new aircraft.
