The merger of Air India (AI, Mumbai International) and Vistara (UK, Delhi International) has been submitted to the Competition Commission of India (CCI) by Tata Sons for permission. After the CCI rules—which is anticipated to take around two months—the National Company Law Tribunal of India and the competition regulators in the countries both airlines serve, including Germany, Singapore, the UK, and the UAE, must both approve the merger.
“The proposed transaction relates to consideration of the merger of Tata Singapore Airlines Limited (Vistara) into Air India and the acquisition of shares in the merged entity by Singapore Airlines (SQ, Singapore Changi) and Tata Sons,” the notification submitted to the CCI stated. Currently, 49% of Vistara is owned by Singapore Airlines. In exchange for the merger, the airline will receive a 25.1% stake in the expanded Air India company.
Given that they will likely hold a domestic market share of 25.3% as opposed to IndiGo Airlines (6E, Delhi International), the market leader, which now holds a market share of 56.8%, Air India assured the CCI that the merger will not have a negative effect on India’s competitive environment. Additionally, Air India Express (IX, Mumbai International) and AirAsia India (I5, Bangalore International), two low-cost carriers owned by Tata Sons, plan to unite. This plan will be the subject of a second application.
Data from ch-aviation PRO airlines show that Air India travels 61 foreign flights in addition to 79 domestic routes. 52 domestic and 20 foreign routes are serviced by Vistara. Legal experts are quoted in India’s Economic Times as saying that the CCI will concentrate on the routes that both airlines fly on, investigating what effects this might have on competition and what actions could be taken to mitigate this.
