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India's duopoly in the domestic skies -- where IndiGo and Air India collectively control over 90 per cent of the market -- is highly skewed, leaving very little room for new players
Air India Express and AirAsia India have moved to a unified reservation system, whereby passengers can make bookings for both airlines through an integrated website. The move is part of the ongoing process of merging AirAsia India with Air India Express. The combined entity will focus on leisure-oriented and price-sensitive markets.
This is the third enforcement action against a Tata Group airline in over a month.
Tatas-owned Air India plans to acquire no-frills carrier AirAsia India and has sought approval from the Competition Commission for the proposed deal. AirAsia India is majority-owned by Tata Sons Private Ltd with a shareholding of 83.67 per cent and the remaining stake is with AirAsia Investment Ltd (AAIL), which is part of Malaysia's AirAsia Group. Full service carrier Air India and its low-cost subsidiary Air India Express were acquired by Talace Private Limited, a wholly-owned subsidiary of Tata Sons Private Ltd, last year. Besides, Tatas operate full service airline Vistara in a joint venture with Singapore Airlines.
Ending its uncomfortable journey in India after eight years, Malaysia-based AirAsia Group on Wednesday said it has exited AirAsia India by selling its remaining 16.67 per cent stake to Tata Group-owned Air India for Rs 155.64 crore. Later in the day, Air India said it has begun the process of creating a single low-cost carrier subsidiary by merging AirAsia India and Air India Express. A working group consisting AirAsia India CEO Sunil Bhaskaran and Air India Express CEO Aloke Singh has been formed for the two carriers' integration, which is expected to take approximately 12 months, it added.
Sunil Bhaskaran, AirAsia India's chief executive officer (CEO) and managing director (MD), is the front-runner to head the low-cost carrier that will take birth after the merger of Air India Express and AirAsia India, sources said. In a show of confidence, the airline's board extended Bhaskaran's tenure by three years -- until March 2025 -- in a meeting held earlier this year, according to the documents reviewed by Business Standard. Moreover, AirAsia India's board of directors has increased Bhaskaran's salary twice in 2022 -- first in January by 5 per cent and then in June by 7 per cent, the documents showed.
Karnataka Governor Thaawarchand Gehlot was on Thursday denied boarding on an Air India subsidiary AIX Connect flight over alleged 'delay' in reporting.
Tata Sons is all set to acquire a residual stake of 16.33 per cent in AirAsia India from its joint venture (JV) partner AirAsia Berhad for $19 million (or Rs 142 crore) by early next year. The valuation is in accordance with the previous transaction under which AirAsia Berhad had sold its 32.6 per cent stake, said a banking source. Tata Group had increased its stake in AirAsia India at a valuation of $115 million.
Tata group-owned AirAsia India's inability to get approval for international flights is hurting UDAN, the Indian government's regional air connectivity project that also aims to link cities in Northeast India and Odisha to places abroad. Sources said the civil aviation ministry is waiting for the low-cost airline to come under the full ownership of Tata Sons and become part of Air India, the former state-owned carrier now owned by the private conglomerate, before allowing it to operate international flights. Tata owns 84 per cent stake in AirAsia India and it is understood that the group will complete the process of buying rest of the stake by July's end.
Tata Sons will increase its stake in budget carrier AirAsia India (AAI) to 83.67 per cent by acquiring an additional 32.67 per cent for $37.66 million from AirAsia Investment Ltd (AAIL), according to a regulatory filing. Currently, AAIL, which is a wholly-owned subsidiary of Malaysia-based AirAsia, holds 49 per cent stake in the Bengaluru-based AirAsia India. In a regulatory filing to stock exchange Bursa Malaysia, AirAsia said, "The board of directors of AirAsia wishes to announce that its wholly-owned subsidiary AAIL and Tata Sons Pvt Ltd, India, on December 29, entered into a share purchase agreement."
Tata Group-owned AirAsia India, which is in the process of being merged with Air India Express, has taken short-term loans worth Rs 630 crore during the last six months to deal with cash crunch. AirAsia India has been making losses since its first commercial flight on June 12, 2014. Its net loss increased by 42 per cent to Rs 2,178 crore in FY22.
In India, many players are in the throes of chaos and pain but at least one partnership -- Air Asia India -- that was fraying even before the pandemic now finds itself at breaking point, says Anjuli Bhargava.
In a December 2012 interview, Ratan Tata, then preparing to step down as chairman of Tata Sons, expressed doubts about the Tata group re-entering the aviation sector, calling it a space plagued by "destructive competition". But beneath that frustration lay nearly two decades of failed attempts to conquer the Indian skies. In 1994, Tata, along with Singapore Airlines, had plans to launch a joint venture (JV) airline in India.
With cash shortage and plans going awry, the AirAsia owner is looking to cash out of the venture he built with Ratan Tata in 2013.
One thing is certain: The part-Goan, part-Malayali group CEO of Air Asia is not your usual boardroom CEO, and he cultivates the maverick businessman image, buying race car teams and football clubs and taking off-beat bets with his mentor and now buddy Richard Branson of Virgin.
With its nominees on the board, Tata Sons will have the controlling stake of 51%.
AirAsia, the largest low-cost airline in Asia, announced the JV with Tatas late February. Last month FIPB had approved the proposal.
"Heartbroken by the loss of Shri @RNTata2000 Ji, whose visionary leadership not only transformed India's industry but also played a pivotal role in shaping our aviation sector," Naidu said in a post on X.
The case relates to alleged violation of norms by directors of the aviation company for relaxation of 5/20 rules to get licenses for international operations
In the initial phase, it would concentrate on destinations in south India, and on providing connectivity to small towns.
AirAsia India began operations in June 2014.
AirAsia has come under scrutiny since June when GMT Research issued a critical report questioning its accounts.
AirAsia's rival airlines in India have kept themselves super-busy in the past few months -- by moving court against the former's launch, adding flights on the routes where AirAsia is operating, and engaging in a price war.
The Tatas have collectively increased their aggregate airlines seat capacity across domestic and international markets by an impressive 20 per cent, going from 64.03 million in calendar year (CY) 2023 to 76.72 million in the current CY, according to data shared by the group that controls Air India in which Vistara has been merged recently. The Tatas also run Air India Express in which Air Asia India has been merged.
The FIA termed as 'illegal' the clearances granted to the airline by the Finance Ministry and the Foreign Investment Promotion Board and called the grant of Air Operator's Permit or the flying licence to it 'fraudulent'.
It and Vistara both book slots here; former also likely to launch Mumbai flights from early 2015.
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Swamy had written to the Election Commission, the DGCA and the Civil Aviation Ministry not to grant a license to the carrier.
'JRD Tata was a visionary who established civil aviation in India'.
Tha airline launches maiden flight to Goa; will begin service to Chennai on June 19.
Budget air-carrier AirAsia has began its three day travel fair, offering 20 per cent discounts on flights across the airline's network.
Though NOC was issued by the Ministry last week, this was the first formal statement by the AirAsia CEO on microblogging site Twitter.
The airline opened bookings on Friday night for its inaugural routes -- Bengaluru-Goa and Bengaluru-Chennai.
AirAsia India, which started operations on June 12 2014, had a market share of 6.2 per cent of the domestic traffic in April.
AirAsia India launched service in June and has two Airbus A320 planes.
The current offer is available for these proposed flights as well, the release said.
The bench of Chief Justice N V Ramana and Justice Pradeep Nandrajog issued notices to the Centre, Foreign Investment Promotion Board and Commerce and Civil Aviation ministries and sought their responses by October 30.
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