AirAsia: Air India proposes to acquire AirAsia India

Air India will be acquiring AirAsia India with a plan to merge the latter with budget carrier Air India Express to cut operational costs, sources close to the development confirmed to ET.

The airline has approached the Competition Commission of India to get the competition watchdogs approval for the proposed transaction.

Presently, Tata Sons own almost 84% stake in AirAsia India while Malaysia’s AirAsia owns the rest.

ET was the first to report last November that Tata Sons has initiated work on the merger of the two airlines. The conglomerate is looking to achieve better synergies between its aviation businesses.

Tata Sons executives have consulted the senior management of both AirAsia India and Air India over the integration of staff and fleets, among other matters. External integration specialists too have been brought onboard for advice on the merger.

“This is the most logical move at this stage and with Tata owning a majority in Air Asia, the integration is easier,” one executive had told ET in November when the merger plans were first reported. “With many experts on deck, this integration will help the group swiftly set up the single airline structure it has been planning for a while.”

Earlier, Tata Sons owned 51% in AirAsia India but have increased their stake over the past couple of years and are expected to completely buy out their joint venture partners soon.

The Tata Group also has Vistara in its fold, where it owns 51% equity with the rest held by Singapore Airlines.