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Tatas Seek Nod From CCI For Merger OF Vistara And AI
The decision is a part of the conglomerate's objective to operate two airlines: a low-cost airline created by merging AirAsia India and Air India Express, and a full-service airline formed by uniting Vistara and Air India
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Tata Sons has sought clearance from the Competition Commission of India (CCI) to merge its joint venture carrier Vistara with Air India so as to streamline operations while establishing a strong aviation business.
The decision is a part of the conglomerate's objective to operate two airlines: a low-cost airline created by merging AirAsia India and Air India Express, and a full-service airline formed by uniting Vistara and Air India.
Tata Sons (TSPL) and Singapore Airlines (SIA) currently partner to operate Tata SIA Airlines (TSAL), also known as Vistara. Tata Sons own 51 per cent of Vistara, with SIA owning the remaining 49 per cent. Air India, on the other hand, is a completely owned subsidiary of TSPL. In 2022, the Tata family acquired ownership of it from the Centre.
According to a notice to the CCI, Tata Sons would own at least 51 per cent of the total issued and paid-up equity share capital following the merger and will continue to retain control over AIL and its subsidiaries, while SIA will have a "minority stake of 25.1 per cent".
The notice also mentions that the move will not lead to any change in the “competitive landscape or cause any appreciable adverse effect on competition in India, irrespective of the manner in which the relevant markets are defined”.
The notice did, however, draw attention to "horizontal overlaps" in the markets for "domestic passenger air transport services in India; international passenger air transport services in India; air cargo transport services in India; and charter flight services in India."
Besides, the notice cited ‘vertical relationships’ such as the upstream market for ground handling services at the Bengaluru, Delhi, Hyderabad and Thiruvananthapuram airports.
“The downstream market for passenger air transport services at Bengaluru, Delhi, Hyderabad and Thiruvananthapuram airports; and the upstream market for in-flight catering services in India; the downstream market for passenger air transport services in India.”