Tata group's Air India takeover worries Singapore's antitrust body

Says move could limit competition on India-Singapore routes

The antitrust regulator of Singapore has raised concern over the Tata group’s acquisition of Air India, saying it could limit competition on the India-Singapore air routes.

The Competition and Consumer Commission of Singapore (CCCS) has sought certain commitments from the Tatas to address the concerns and has decided to review the transaction in “further detail”, it said on Friday.

The Tata group, which owns a majority stake in Vistara – its joint venture with Singapore Airlines, completed the acquisition of Air India on January 27. Both airlines operate on the Mumbai-Singapore and Delhi-Singapore routes and also carry cargo between the two countries. Singapore Airlines is a significant competitor to both Air India and Vistara on these routes. The regulator said it received an application from the Tata group for a decision on whether the acquisition infringes Singapore’s law, which prohibits declared or potential mergers that lessen competition.

The CCCS said it needs to assess further the extent to which Singapore Airlines competes with the “merged entity” on these routes, given that it is a joint venture partner with Tata Sons in Vistara and a prospective partner with Vistara in the commercial cooperation framework agreement

“The CCCS also needs to assess further whether the competitive constraint from other airlines such as IndiGo would be sufficient post transaction,” it said.

“The regulator would like to ascertain that the acquisition of Air India does not lead to appreciable adverse effect on competition and that is why the Tata group has been asked to make certain commitments,” a lawyer remarked.

Tata Sons did not comment.

Vistara CEO Vinod Kannan was earlier quoted as saying that the airline functions as a separate entity and treats Air India as a competitor. “We will be keeping an arm’s length (from Air India) on issues that are customer-friendly or commercially sensitive,” he had said in February.

Mayur Patel, regional sales director of aviation data analytics firm OAG, believes the acquisition will not pose threat to competition.

“Based on the schedule capacity data for the May 2022 period, it can be concluded that the capacity share of the merged entity of Air India, Air India Express and Vistara would be 20 per cent, which should not pose any anti-competitive threat to the India-Singapore market. On the other hand, IndiGo has a capacity share of 15 per cent on the country pair during the same period,” Patel said.