Monday, September 27, 2021

Tatas mulling to house AirAsia India, Vistara under single entity if Air India bid succeeds

New Delhi: Tata Sons—the holding company of the $113-billion Tata group—is reportedly considering bringing budget airline AirAsia India under the Air India brand if its bid for the national carrier succeeds. Last year, the coffee-to-cars conglomerate had raised its stake in AirAsia India in an earnest attempt to increase its share of the country’s airline industry.

Subsequently, full-service airline Vistara, a joint venture between Tata Sons and Singapore Airlines (SIA), is also expected to be part of a combined entity if SIA, its 49 per cent shareholder, comes on board, people with knowledge of the matter told ET.

Malaysia’s flagship budget airline AirAsia Group Bhd, which owns about 16 per cent stake in AirAsia India, has decided to exit India by March 2022, offloading its remaining stake for $18 million. Plus, the Tata group has approached SIA about its eventual plan to group their joint venture Vistara under a single airline company to consolidate and strengthen its foothold in one the world’s fastest-growing aviation market.

The financial quoted a SIA spokesperson as saying, “We do not comment on any confidential discussions we may or may not be having with our partners.”  Tata Sons, AirAsia India and Vistara declined to comment.

Earlier this month, the Tatas and low-cost carrier SpiceJet promoter Ajay Singh had submitted financial bids to buy ailing national carrier Air India. “Financial bids for Air India disinvestment received by transaction adviser. Process now moves to the concluding stage,” Tuhin Kanta Pandey, secretary of the Finance Ministry’s Department of Investment and Public Asset Management (DIPAM) had tweeted.

Reports earlier surfaced that if the Mumbai-based conglomerate acquires the state-owned carrier, AirAsia India was likely to be merged with low-cost unit Air India Express and that SIA had been persuaded to combine Vistara’s network with that of Air India.

The Tata group is considering roping in integration experts to create a single airline entity, given the difficulties involved in amalgamating multiple organisational structures, the daily quoted people cited above as saying. It is important to note that the Tata group owns 51.49 per cent of Vistara, with the rest held by SIA and the group has 83.67 per cent stake In Air Asia.

27/09/21 ETNowNews.com

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