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NEW DELHI: The Competition Commission of India (CCI) has issued a show-cause notice to Air India, asking why the proposal to merge Vistara into it should not be investigated. The Tata Group’s Maharaja has to respond within 30 days and try to clear the anti-monopoly regulator’s doubts to seek the go-ahead for merging of India’s two full-service (FSC) airlines — AI and Vistara. Comments have been sought from AI on the issue and are awaited.
Merger proposals are vetted by CCI after examining whether the same will adversely impact competition. India has only two full-service airlines — AI and Vistara — both of Tata Group.
Last November, Tatas and Singapore Airlines (SIA) had announced their plan to have one FSC by March 2024. While submitting a joint proposal for the two FSCs’ merger this April, Tata Sons, AI, Vistara and SIA had said merging Vistara into Air India “will not lead to any change in the competitive landscape or cause any appreciable adverse effect on competition in India”.
Vistara is 51% owned byTatas and 49% by SIA. The proposed merger of Vistara into AI will have SIA as a 25. 1% stake holder in the merged entity and the rest will be with Tatas. SIA will invest $250 million as soon as this integration is completed, valuing the upcoming mega AI at about $1 billion. The Southeast Asian airline says it intends to fully fund this investment with its internal cash resources, which stood at S$17. 5 billion as of September 30, 2022.
The Tatas are similarly merging low cost AirAsia India into Air India Express. The idea is to have one airline — a mega AI — with a LCC arm.
Merger proposals are vetted by CCI after examining whether the same will adversely impact competition. India has only two full-service airlines — AI and Vistara — both of Tata Group.
Last November, Tatas and Singapore Airlines (SIA) had announced their plan to have one FSC by March 2024. While submitting a joint proposal for the two FSCs’ merger this April, Tata Sons, AI, Vistara and SIA had said merging Vistara into Air India “will not lead to any change in the competitive landscape or cause any appreciable adverse effect on competition in India”.
Vistara is 51% owned byTatas and 49% by SIA. The proposed merger of Vistara into AI will have SIA as a 25. 1% stake holder in the merged entity and the rest will be with Tatas. SIA will invest $250 million as soon as this integration is completed, valuing the upcoming mega AI at about $1 billion. The Southeast Asian airline says it intends to fully fund this investment with its internal cash resources, which stood at S$17. 5 billion as of September 30, 2022.
The Tatas are similarly merging low cost AirAsia India into Air India Express. The idea is to have one airline — a mega AI — with a LCC arm.
#CCI #AIVistara #merger #investigated
