Tata Group is planning to integrate its airline brands, such as the low-fare AirAsia India, under the Air India umbrella if it successfully acquires the beleagured national carrier.
The company will also aim to bring Vistara under the umbrella, if Singapore Airlines, which owns 49 per cent of the shares in it, agrees to the plan, according to a report by The Economic Times.
While Malaysia's AirAsia will exit by March 2022, selling its stake for $18 million, Tata has reached out to SIA on grouping the airlines under one entity to 'ensure synergy and eliminate duplication,' according to the report.
Air India, AirAsia India and Vistara currently have a collective 26 per cent share of the domestic air passenger market, according to the DCGI.
"The group has been very clear that if and when the Air India acquisition is done, the strategy is to have one entity," a person aware of the developments told ET. "Scale up the game and be the number one player in the space. AirAsia is now a Tata company and so it will be easier to merge the business. Also, operationally, it would not be sensible in a thin-margin competitive sector to have multiple cost structures."
Tata, which bid for the national carrier through a new subsidiary, Talace, has appointed Seabury Group and Bain Capital to conduct due diligence before it invests in Air India if the bid succeeds.
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(Published 27 September 2021, 08:28 IST)
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