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Journalism of Courage
IN WHAT marks the beginning of the consolidation of the Tata Group’s aviation portfolio, its newly acquired airline, Air India, has sought approval from the Competition Commission of India (CCI) for the acquisition of its Bengaluru-based sister-airline AirAsia India. Additionally, the salt-to-software conglomerate has chalked up plans to move its five aviation companies — Air India, Air India Express, Vistara, AirAsia India and Air India SATS Airport Services — under a single roof in Gurgaon.
AirAsia India, a low-cost airline which was launched as a joint venture between the Tatas and Malaysia’s AirAsia Group, is 83.67 per cent owned by the Tata Group with the remaining stake being held by the Malaysian company.
“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,” a notice filed with the CCI said. Deals beyond a certain threshold require the approval of the antitrust body.
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. According to the notice, the proposed combination will not lead to any change in the competitive landscape or cause any appreciable adverse effect on competition in India, irrespective of the manner in which the relevant markets are defined.
Only a year after AirAsia India took to the skies, the Tata Group launched a full-service airline Vistara, in a 51:49 joint-venture with Singapore Airlines.
Earlier this year, after participating in the government’s disinvestment exercise of Air India, the Tatas took control of the national airline, along with its subsidiary Air India Express, and Air India’s stake in joint venture ground handling company Air India SATS Airport Services.
While Bengaluru-based AirAsia India operates low-cost domestic flights, Gurgaon-based Vistara operates domestic and international full-service flights, similar to Delhi-headquartered Air India. Kochi-based Air India Express, on the other hand, does low-cost international operations, mainly connecting India with West Asian destinations like Dubai, Abu Dhabi, Riyadh, Kuwait, Muscat, Dammam etc in addition to Malaysia and Singapore.
According to a memo sent to the top management of these entities by the Tata Group, these aviation companies are expected to be housed in the same corporate office in Gurgaon. “…it has been decided that to optimise resources, increase team work and have higher synergies at work, the various entities will move together into a complex in Gurgaon… a new office space on NH-8 has been identified…,” the memo noted.
According to sources, the conglomerate had roped in its real estate company, Tata Realty, to identify the new office space that is 70,000 square feet in area, and the relocation is expected to begin over the next few months. For the relocation plan, the group has assigned the responsibility to Air India’s Executive Director Harpreet A De Singh, who is expected to prepare a strategy plan along with consultancy firm EY.
The strategy planning team for the relocation has sought inputs from the various entities pertaining to their office space requirements, to come up with a plan “at the earliest”.
