Tatas to merge AirAsia India with Air India Express: Report
Tata Sons has reportedly started the process to merge low-fare carrier AirAsia India with Air India Express. The development comes after it secured the bid to acquire Air India in October.
Tata Sons plans to merge low-fare airline AirAsia India with Air India Express, the budget carrier of Air India. The development comes after the conglomerate successfully bought Air India from the government.
The move is aimed at achieving operational synergies and cutting operational costs, reported The Economic Times after speaking with top executives close to the development.
The decision to merge has been taken by the group as it owns an 84 per cent stake in AirAsia India and paves the way for a quick merger.
However, Tata Sons is yet to finalise talks with Singapore Airlines (SIA) on integrating the schedules of Vistara and Air India, as per the sources quoted in the ET report. It may be noted that Tata group owns a 51 per cent stake in Vistara and SIA holds the rest.
REASON BEHIND MERGER MOVE
One of the sources quoted in the article termed the merger as a logical move as Tata owns a majority stake in AirAsia India, making way for easier integration.
The Tata group had plans to create a single airline entity for a long time and it can now move forward with it after successfully acquiring Air India.
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The ET report said Tata Sons has held several meetings in recent weeks with senior management of AirAsia India and Air India to discuss the integration of staff, aircraft quality and safety checks among other matters. The sources quoted in the report also confirmed that external integration specialists were part of the meetings as well.
Tata Sons has not officially confirmed the development, nor has it commented on the merger.
Tata group owned Talance Private Limited had secured the bid to own 100 per cent of Air India and its subsidiary Air India Express on October 8. The acquisition is likely to be completed by the end of the year.
The plan to create a single aviation unit could give the conglomerate a major advantage in the Indian aviation space. The creation of an umbrella for all its airline businesses would not only lead to better cost management, but also help it offer a wider range of services under a unified brand.
Also Read: Tata got Rs 2.8 cr when Nehru govt took over Air India. Now group pays Rs 18,000 cr to buy it back