Tata Sons Private Ltd currently owns 83.67% of no-frills carrier AirAsia India, while the remaining stake is owned by Air Asia Investment Ltd (AAIL), which is a part of Malaysia’s Air Asia Group.
Air India has suggested acquiring AirAsia India’s complete stock. The proposal for Air India’s acquisition of AirAsia India has also been notified by the Competition Commission of India (CCI).
According to the CCI notification under Sections 5(a)(i)(A) and 5(b)(i)(A) of the Competition Act, 2002, the proposed combination involves Air India acquiring the whole equity share capital of AirAsia India. Tata Sons (TSPL) now owns 83.67 percent of Air Asia India’s equity share capital.
It further noted: “The proposed combination 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.”
Notably, both airlines are controlled by Tata Sons – Air India is a wholly owned subsidiary of Tata Sons, while AirAsia India is a joint venture with Malaysia’s AirAsia, which owns 16.33 percent of the company.
According to the announcement, Air India has reported the relevant markets in terms of horizontal overlaps. These include the domestic passenger air transport services market in India, the domestic air cargo transportation services market in India and the domestic charter flight services industry in India.
It has also provided the relevant marketplaces that have vertical overlaps. They are as follows:
— The upstream market for ground handling services, as well as the downstream market for passenger air transport services (including charter flight services) at the airports of Bengaluru, Hyderabad, Delhi, Thiruvananthapuram, and Mangalore; and the upstream market for cargo handling services at the airport of Bengaluru.
— The upstream market for cargo handling services, as well as the downstream markets for air cargo transportation and charter flight services at Bengaluru International Airport.
— The downstream market for passenger air transport services (including charter flight services) in India, as well as the upstream market for in-flight food services.
“The proposed combination relates to the acquisition of the entire equity share capital of AirAsia (India) Private Limited (Air Asia India/ Target), by Air India Ltd (AIL), an indirect wholly-owned subsidiary of Tata Sons Private Limited,” a notice filed with the Competition Commission of India (CCI) said.
Deals over a specific level must be approved by CCI, which seeks to promote competition while also combating anti-competitive activities in the marketplace. AirAsia India, which began operations in June 2014, provides scheduled air passenger transport, cargo transport, and charter flight services throughout the nation. It has no overseas activities.