CCI approves proposed acquisition of AirAsia India by Air India

The two combined entities will have a 15.7% share of India's domestic passenger market

Anti-trust regulator Competition Commission of India (CCI) on Tuesday said it has approved acquisition of entire shareholding in AirAsia India by Air India, a wholly-owned subsidiary of Tata Sons.

“The proposed combination relates to the acquisition of the entire equity share capital of AirAsia India Private Limited by Air India Ltd- an indirect wholly-owned subsidiary of Tata Sons Private Limited (TSPL). At present, TSPL holds 83.67 per cent of the equity share capital of Air Asia India,” stated the filed notice with CCI.

The two combined entities will have a 15.7 per cent share of India’s domestic passenger market. Air India Express - a subsidiary of Air India doesn’t operate in the domestic market and flies only between India and Gulf routes.

Tatas raised their stake in AirAsia India to 83.67 per cent in December 2020 and are likely to complete the acquisition of the remaining 16 per cent stake from Malaysian airline group AirAsia Berhad, reported Business Standard in late April. 

Tata Sons, which assumed management control of Air India in January, has started the process of integrating the four airlines under its belt. As part of this process, all four airlines- Air India, Air India Express, Vistara, AirAsia India, and ground handling firm AISATS will move into a single office.

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.

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.

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.