Explained: Consolidation in the sky as antitrust watchdog OKs AI acquisition of AirAsia India

AirAsia India operates low-cost airline services in domestic sectors in India. The airline was founded as a joint-venture between the Tata Group and Tony Fernandes-led AirAsia Bhd in 2014.

The conglomerate is in process of consolidating its aviation portfolio.

The Competition Commission of India (CCI) has approved the acquisition of AirAsia India’s entire equity share by Tata Group-owned Air India. Currently, Tata Sons, the holding company of the Mumbai-based conglomerate, has 83.67% share in AirAsia India, while the remaining is held by Malaysia’s AirAsia Bhd.

Formal approval

This is the first formal regulatory approval to Tata Group’s plan to consolidate its aviation portfolio. “CCI approves acquisition of the entire shareholding in AirAsia India by Air India, a wholly-owned subsidiary of Tata Sons,” the antitrust panel said.

Significance

AirAsia India operates low-cost airline services in domestic sectors in India. The airline was founded as a joint-venture between the Tata Group and Tony Fernandes-led AirAsia Bhd in 2014. Tata Group later launched full-service airline Vistara in a 51:49 joint-venture with Singapore Airlines and bought 100% stake in Air India, along with its low-cost subsidiary Air India Express earlier this year.

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The conglomerate is in process of consolidating its aviation portfolio. It is also learnt to be moving all its aviation brands to a single corporate office in Gurugram.