Air India (AI, Delhi International) has acquired a 100% shareholding in AirAsia India (Bengaluru International) and plans to rebrand and merge the airline with Air India Express (IX, Delhi International). First flying in 2014, AirAsia India was a joint venture between Tata Sons, owners of Air India, and AirAsia Aviation Group. Tata Sons then increased their initial 51% shareholding to 83.67% more recently. Picking up the remaining 16.33%, which was subject to government approval, cost Tata INR1,556,487,800 Indian rupees (USD18.8 million).
Campbell Wilson, CEO and managing director of Air India, said Tata would now work on building a single Air India Group low-cost carrier. The merger with Air India Express is flagged to finalise before the end of 2023 and a working group has already been established to decide how best to do this. Reporting to Wilson, co-leads of the group include the Air India Express CEO, Aloke Singh, and AirAsia India's CEO and managing director, Sunil Bhaskaran. Unsurprisingly, the merged airline is unlikely to need two CEOs.
"The assessment and implementation of the full integration process of AirAsia India and Air India Express, through a possible scheme of merger or otherwise and subject to necessary corporate approvals, is expected to take approximately 12 months," reads a statement from Air India. AirAsia India had grown to become India's fifth-largest airline with a 5.7% domestic market share. Air India Express currently has a 10% domestic market share.
"Covid has allowed us to re-examine our priorities, and we felt that it was best suited for AirAsia to develop an ASEAN-only business," said Group CEO of AirAsia Aviation Group Bo Lingam when announcing the transaction. "We have had a great experience working with India’s leading Tata Group."
Lingam says India will remain an important market and continue to be served by the various AirAsia airlines based in Malaysia, Thailand, Indonesia, and the Philippines. Tata's airline portfolio now includes Air India, Air India Express, AirAsia India, and Vistara (Delhi International). The last airline is operated as a joint venture between Tata and Singapore Airlines (SQ, Singapore Changi). Separately, talks are also underway to merge Vistara with Air India and to "deepen the relationship" between Tata Sons and Singapore Airlines.
