Tata Group-owned Air India has proposed to acquire a 100 per cent equity of AirAsia (India) Private Limited. The Competition Commission of India (CCI) notified on Wednesday that Air India had proposed to acquire the entire equity of AirAsia India. Both the airlines are run by the Tata Group — Air India entirely and AirAsia India jointly with the AirAsia Group.
"The proposed combination relates to the acquisition of the entire equity share capital of AirAsia (India) Private Limited (Air Asia India/ Target), by Air India Ltd (AIL), an indirect wholly owned subsidiary of Tata Sons Private Limited," a notice filed with the CCI said. Deals beyond a certain threshold require the approval of CCI, which works to foster competition as well as curb anti-competitive practices in the market place.
According to the notice, 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. AirAsia India is majority-owned by Tata Sons Private Ltd with a shareholding of 83.67 per cent and the remaining stake is with AirAsia Investment Ltd (AAIL), which is part of Malaysia's AirAsia Group.
After taking control of Air India, Tata Sons started increasing cooperation among its airlines. As a first step, Air India and AirAsia India were to accept each other's domestic passengers in case of flight disruptions.
The two had signed an agreement to offer seats to passengers at the first availability to minimise inconvenience, and this deal was to stay in force till February 9, 2024.
Besides, Tatas operate full service airline Vistara in a joint venture with Singapore Airlines. The latest move is likely a part of the sprawling group's efforts to consolidate its airline operations.