Air India proposes to acquire AirAsia India
Highlight
- The proposed deal is pending approval from the Competition Commission
- AirAsia India is majority owned by Tata Sons Pvt Ltd with 83.67 per cent stake.
- The remaining stake is with AirAsia Investment Limited (AAIL).
Tata-owned Air India plans to acquire no-frills carrier AirAsia India and has sought the Competition Commission’s approval for the proposed deal. Tata Sons Private Limited holds a majority stake in AirAsia India with 83.67 percent stake and the remaining stake is held by AirAsia Investment Limited (AAIL), which is part of Malaysia’s AirAsia Group.
Full-service carrier Air India and its low-cost subsidiary Air India Express were acquired last year by Tales Pvt Ltd, a wholly owned subsidiary of Tata Sons Pvt Ltd.
In addition, Tata operates full-service airline Vistara in a joint venture with Singapore Airlines.
The latest move is likely a part of the giant conglomerate’s efforts to strengthen its airline operations.
“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 Limited (AIL), an indirect wholly owned subsidiary of Tata Sons Private Limited.” A notice filed with the Competition Commission of India (CCI) said.
Transactions above a certain threshold require the approval of the CCI, which works to promote competition as well as curb anti-competitive practices in the market.
AirAsia India, which started flying in June 2014, provides scheduled air passenger transport, air cargo transport and charter flight services in the country. It has no international operations.
According to the notice, the proposed combination will not alter the competitive landscape or have a significant adverse effect on competition in India, irrespective of the respective markets as defined.
Tata had acquired Air India and Air India Express in January this year.
In October 2021, Tata emerged as the winning bidder for loss-making Air India. It offered a bid of Rs 18,000 crore, which includes a cash payment of Rs 2,700 crore and the carrier’s debt of Rs 15,300 crore.
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