Air India Ltd has reportedly offered to buy out AirAsia (India) Private Limited, according to a notification from the CCI (Competition Commission of India). Tata Group, the owners of both airlines, has been attempting to maintain collaboration between its airlines. This move will help the conglomerate in achieving its objective.
In its notification, the competition watchdog stated that the proposed consolidation was associated with the acquisition of all the equity share capital of AirAsia India by Air India, an indirectly fully owned subsidiary of TSPL (Tata Sons Private Limited) which currently holds nearly 83.67% of AirAsia India’s equity.
Interestingly, Tata Sons bought Air India from the Central Government through Talace Pvt Ltd, its wholly-owned subsidiary. In the meantime, AirAsia India is a JV (joint venture) between AirAsia Group and Tata Sons, where the former owns a 16.33% stake, and the latter owns an 83.67% stake.
CCI pointed out that the planned consolidation will not cause any significant effects or lead to changes in the competitive landscape of India irrespective of the definition of the relevant markets.
However, the proposal for the acquisition comprises some vertical and horizontal overlaps. Both AirAsia and Air India operate in the domestic air passenger business along with charter flights and air cargo transport across the country. These are part of the horizontal overlaps of the consolidation.
Additionally, Air India, and its subsidiary Air India Express, offer international services for transporting scheduled air passengers.
The consolidation will lead to vertical overlapping in the upstream ground handling services market and downstream passenger air transport services market, including charter flights, at Mangalore, Thiruvananthapuram, Delhi, Hyderabad, and Bengaluru.
Moreover, there will be vertical overlaps in the upstream cargo handling services market and the downstream charter flight services and air cargo transportation service markets at Bengaluru airport, along with the upstream in-flight catering services market and downstream passenger air transport services market in India.
Source credit:
https://www.fortuneindia.com/enterprise/air-india-offers-to-buy-out-airasia-india/107933
