The Competition Commission of India (
CCI) notified on Wednesday that
Air India had proposed to acquire the entire equity of
AirAsia India. Both the airlines are run by the Tata Group -- Air India entirely and AirAsia India jointly with the AirAsia Group.
"The proposed combination relates to the acquisition of the entire equity share capital of AirAsia (India) by Air India, an indirect wholly-owned subsidiary of Tata Sons. At present, Tata Sons holds 83.67 percent of the equity share capital of AirAsia India," the CCI notification stated.
Tata Sons had raised its stake in AirAsia India in December 2020 after it proposed to buy an additional 32.67 percent of equity shares for $37.7 million. After the sale, Malaysia's flagship budget carrier AirAsia's stake was reduced to 16.33 percent.
The Tata group had raised its stake in AirAsia India at a valuation of $115 million. As per that valuation, Tata Sons could acquire the 16.33 percent residual stake for $19 million (Rs 142 crore).
According to the CCI notification, the proposed combination "would not change the competitive landscape or cause any appreciable adverse effect on competition in India, irrespective of how the relevant markets are defined".
The CCI submitted that the relevant markets involving horizontal overlaps for the proposed combination would be those for domestic passenger air transport services, domestic air cargo transportation services, and charter flight services.
The relevant markets involving vertical overlaps would be the upstream market for ground handling services and the downstream market for passenger air transport services (including charter flight services) at Bengaluru, Hyderabad, Delhi, Thiruvananthapuram, and Mangalore airports.
The proposed combination would also have vertical overlaps in the upstream market for cargo handling services and the downstream markets for air cargo transportation services and charter fight services at Bengaluru airport. And also in the upstream market for in-flight catering services and the downstream market for passenger air transport services (including charter flight services) across India.
After
taking control of Air India, Tata Sons started increasing cooperation among its airlines. As a first step, Air India and AirAsia India were to accept each other's domestic passengers in case of flight disruptions. The two had signed an agreement to offer seats to passengers at the first availability to minimise inconvenience, and this deal was to stay in force till February 9, 2024.
The Tata Group has
four airlines in its fold -- Air India, Air India Express, AirAsia India, and Vistara.
First Published: Apr 27, 2022 10:26 AM IST
