In a fillip to the integration of airline entities owned by Tata Sons, the Competition Commission of India on Tuesday approved Air India's proposal to acquire the entire shareholding of low-cost subsidiary AirAsia India.
"The proposed combination envisages the acquisition of the entire equity share capital of AirAsia (India) Private Limited (Air Asia India) by Air India Ltd. (AIL), an indirect wholly owned subsidiary of Tata Sons Private Limited (TSPL). The latter currently holds 83.67% of the equity share capital of AirAsia India," the CCI said in a press statement.
AirAsia India was set up in 2014 as a joint venture between Tata Sons and Malaysia-based AirAsia Berhad, in which Tatas raised their stake to 83.67% in December 2020. The airline doesn't have rights to operate international flights. Air India and AirAsia India have a combined domestic market share of 13%.
The nod comes almost six months after the government transferred the ownership of Air India and Air India Express to Tata Sons.
Tata Sons has four airlines in its fold - Air India, Air India Express, AirAsia India and a 51% stake in the joint venture with Singapore Airlines, Vistara. Air India Express doesn't have domestic flights, and the remaining three together have domestic market share of 21%.
An integration of Vistara’s business with Air India is likely to take time as negotiations are still underway with Singapore Airlines.
Meanwhile, the Competition and Consumer Commission of Singapore recently expressed concern over the Tatas acquiring Air India as three related entities - Singapore Airlines, Tata Sons and Vistara - have "overlapping passenger routes" between India and the city state, saying it needed to "assess further" whether there was sufficient competition from other unrelated airlines such as IndiGo.