Tata Sons has commenced work on the merger of low-fare airline AirAsia India with Air India's budget carrier Air India Express, said top executives close to the development. As the Tata group takes over Air India, it's looking to achieve synergies and cut operational costs.
With Tata owning 84% stake in AirAsia India, this first step in creating a single airline entity can be taken in a relatively short span of time, they said. Tata is yet to conclude talks with Singapore Airlines (SIA) on integrating the schedules of Vistara and Air India, the people said. Tata owns 51% of Vistara and SIA holds the rest.
"This is the most logical move at this stage and with Tata owning a majority in Air Asia, the integration is easier," said one of the persons. "With many experts on deck, this integration will help the group swiftly set up the single airline structure it has been planning for a while."
Tata Sons has held several meetings in recent weeks with the senior management of AirAsia India and Air India to discuss the integration of staff, and aircraft quality and safety checks, among other matters. External integration specialists have been part of these meetings, said the people cited above.
"There is a sense of urgency to quickly get operations seamlessly off the ground and ensure no disruptions at customer-facing points," said one of them.
"Duality of operations and staff redeployment are also being looked into for cost efficiencies," said a source.
Tata Sons didn't respond to queries. A spokesperson at AirAsia India declined to comment.
On October 8, the Tata group owned Talace Pvt Ltd won the bid to own 100% of Air India and its subsidiary Air India Express. The transaction awaits cabinet approval and the acquisition is scheduled to take effect at the end of the year.
18/11/21 Kala Vijayaraghavan & Anirban Chowdhury/Economic Times
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