The Competition Commission of India (CCI) on Tuesday said it has approved Tata group-owned Air India’s proposal to acquire the entire shareholding in no-frills carrier AirAsia India. Currently, Tata Sons holds 83.67 per cent of the equity share capital of Air Asia India, and the rest is held by AirAsia Investment Ltd (AAIL), which is part of Malaysia’s AirAsia Group.
“The proposed combination envisages the acquisition of the entire equity share capital of AirAsia (India) Private Limited (Air Asia India) by Air India Ltd. (AIL), an indirect wholly-owned subsidiary of TSPL (Tata Sons Pvt Ltd). At present, TSPL holds 83.67 per cent of the equity share capital of Air Asia India,” the competition regulator said in a statement.
Deals beyond a certain threshold require competition watchdog CCI’s approval. AirAsia India, which started flying in June 2014, offers scheduled air passenger transport, air cargo transport and charter flight services in the country.
“AIL, along with its wholly-owned subsidiary, Air India Express Limited (AIXL), is primarily engaged in the business of providing (a) domestic scheduled air passenger transport service, (b) international scheduled air passenger transport service, (c) air cargo transport services in India, and (d) charter flight services in India,” the CCI said in the statement.
Air Asia India is a joint venture between TSPL and Air India Investment Limited (AAIL), with TSPL currently holding 83.67 per cent and AAIL holding 16.33 per cent of the shareholding.
“Air Asia India operates under the brand name ‘AirAsia’. It is engaged in the business of providing the following services: (a) domestic scheduled air passenger transport service, (b) air cargo transport services, and (c) charter flight services in India. AirAsia India does not provide scheduled air passenger transport services on international routes,” the CCI added.
Tatas also took over Air India and Air India Express in January this year. The Tata group in October 2021 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. In January, the Tata group regained ownership of Air India.
Both Air India and AirAsia are run by the Tata group. Air India is a wholly-owned subsidiary, while AirAsia India is a joint venture with Malaysia’s AirAsia, which has 16.33 per cent of the shareholding. Apart from this, the Tata group also operates full-service carrier Vistara in a joint venture with Singapore Airlines.
AirAsia India in December 2021 informed that it has paid all its dues to the Airports Authority of India (AAI) and the airline was making all payments as per credit terms on due dates from September 2021. AirAsia India’s dues to the AAI increased from Rs 1.47 crore in January 2020 to Rs 3.58 crore in October 2021, as per AAI’s internal documents.