The Tatas have begun the task of consolidating their airline’s businesses through a proposed merger — of AirAsia India Pvt Ltd (AAIPL) with Air India (AI) — and bringing together all these entities under one roof at a mega office in Gurgaon.
AAIPL started operating in 2014
AI has announced to the Competition Commission of India (CCI) its plan to merge AAIPL into it, thereby beginning the legal process of this consolidation. AAIPL started operating in 2014, a year before the second Tata JV Vistara, and even does not have rights to fly abroad
The offered combination relates to the acquisition of the entire equity share capital of AAIPL by AI, an indirect wholly-owned subsidiary of Tata Sons Private Limited (TSPL). At present, TSPL holds 83.67% of the equity share capital of AAIPL. The offered combination is notifiable under… the Competition Act, 2002,” the notification to CCI says.
AAIPL is a joint experience in which Tatas have an 83.67% stake and the remaining 16.33% switch to AirAsia. “The Proposed Combination will not lead to any change in the competitive landscape or cause any appreciable adverse effect on competition in India, irrespective of the manner in which the relevant markets are defined,” it said.
The Tata Group has begun to move to have greater synergy between its four airlines by shifting them to one mega office in Delhi’s suburb of Gurgaon. It has identified an office space of up to 70,000 square feet which can be leased “immediately”. Working with Tata Realty, the group is now finalizing its office need and plans to start the transition at the earliest.
“Considering the existing 4 (airlines) and one JV (AI-SATS) as part of the Tata fold, it has been decided that to optimize resources, increase teamwork, and have higher synergies at work, the various entities will move together into a complex in Gurgaon to start with as far as possible in a phased manner.
Tata aviation entities say
New office space on NH8 has already been identified where we have an option to lease up to 700,000 sq ft immediately,” a communication sent to the heads of these five Tata aviation entities tells.
We now need to finalize our exact space requirement and begin preparing for the transition to this new space immediately. We are targeting to move in the next 2-3 months. For this purpose, to develop the strategic plan, the task has been entrusted to Harpreet A De Singh, ED headquarters, along with the Consultants from Ernst and Young,” it said
The entities have been requested to give details about their required office space to this team “in a timely manner, to facilitate this strategic transformation and consolidation at the earliest.” This shift will consolidate Gurgaon’s pre-eminence in Indian aviation as it already houses IndiGo and SpiceJet.
The Tata Group had taken over AI and AI Express this January-end.
It is yet to spell out the consolidation among the four airlines, with the options being: a low cost by merging AI Express and AirAsia India, AI and Vistara; one full service and a low cost; AI (merging all three) and Vistara till the latter’s 49% stakeholder Singapore Airlines agrees to a merger with AI. The group is trying to get a CEO for its airline business to finalize the future course of action.
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