Tata Sons may be looking to consolidate its airline business.
The 150-year-old group is bringing its multiple airlines—Air Asia and Vistara—under Air India, a company it launched decades ago and was later nationalised. Last year, Tata Sons re-acquired Air India from the Indian government.
The merger is still being planned, The Indian Express reported today. “Consolidation process is likely to start with the merger of AirAsia India into Air India Express, to be completed over the next 12 months,” it said quoting unnamed sources.
The Tata group has 17 publicly listed companies involved in businesses ranging from salt-making to retail to car-making. Its airline portfolio includes 83.67% ownership in AirAsia India and a majority 51% holding in Vistara.
Now, the Tatas reportedly plan to buy out Malaysia-based AirAsia Berhad’s entire 16.33% stake in AirAsia India for $30 million. Singapore Airlines own a 49% share in Vistara.
Following consolidation, the Tata group will become India’s largest and one of its strongest airlines. But that may not come easy.
“Issues like cabin crew dress, branding (likely to be called Air India Express or something similar) are still being discussed at various levels. There are complexities since both airlines are different in terms of service, crew attire, etc,” the Indian Express quoted a source as saying.
Air India’s new CEO Campbell Wilson has outlined a five-year roadmap to re-establish it as a world-class airline with a domestic market share of 30%.
Code-named Vihaan.AI—Vihaan is Sanskrit for the dawn of a new era—Air India’s transformation would focus on expanding the fleet, adding routes, and revamping the customer proposition.