Air India offers to buy remaining stake in Air Asia, can give new life to airline

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), as reported by PTI.

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Tata-owned Air India has sought approval from the Competition Commission of India as it plans to acquire no-frills carrier AirAsia India. AirAsia India is majority-owned by Tata Sons Private Ltd with a shareholding of 83.67 per cent.

The remaining stake is with AirAsia Investment Ltd (AAIL), which is part of Malaysia's AirAsia Group. Full-service carrier Air India and its low-cost subsidiary Air India Express were acquired by Talace Private Limited, a wholly-owned subsidiary of Tata Sons Private Ltd, last year.

Besides, Tata group operates 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.

"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 Competition Commission of India (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 marketplace. AirAsia India, which started flying in June 2014, offers scheduled air passenger transport, air cargo transport, and charter flight services in the country. It does not have international operations.

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 how the relevant markets are defined.

Tatas took over Air India and Air India Express in January this year. In October 2021, Tatas emerged as the winning bidder for loss-making Air India. It offered a bid of Rs 18,000 crore, comprising cash payment of Rs 2,700 crore and taking over the carrier's debt worth Rs 15,300 crore.

(With inputs from PTI)