New Delhi: It is reported that Tata Sons has started the process of bringing all its airlines – Vistara, AirAsia India, and Air India Express under one fund of Air India. The move is expected to be announced by the company within a week. After this merger, Tata Sons will have a low-cost carrier and a full-service airline under Air India. It is being said that it may take more than 1 year to bring them completely under one banner.
According to a report in Economic Times, the process was initiated after several rounds of discussions with Singapore Airlines (SIA). Added to this was the fact that post-execution if everything goes according to plan, Air India could become the second-largest airline in the country in terms of market share and fleet.
Vistara brand may be removed
The report also said that the Vistara brand may be dropped. Singapore Airlines is expected to be a minority shareholder in Air India. Some of the earlier board members are expected to join the board of Air India.
Tata Sons had earlier completed the consolidation process of Air India Express and AirAsia India after the company bought the stake. As per the last available information, Tata Sons held a 51 percent stake in Vistara.
Recently, AirAsia Aviation Group Limited (formerly known as AirAsia Investment Limited (AAAGL)) said that it has sold the remaining 16.33 percent stake in AirAsia India (AAI) to Air India Limited.
What will happen after the transaction is completed?
AirAsia Aviation Group said, “After the completion of the transaction, AAAGL will have no equity interest in AAI, and the Brand License and Technical Services Agreement between AirAsia Berhad and AAI shall be terminated 12 days from the date of termination of the Shareholders Agreement between the parties. will be terminated on or before the month after, if intimated by AAI.”
Tata acquired Air India and Air India Express in January. In October 2021, Tata emerged as the winning bidder for loss-making Air India. It offered a bid of Rs 18,000 crore, which includes a cash payment of Rs 2,700 crore and the carrier’s debt of Rs 15,300 crore.
