Tata Sons Ltd—the holding company for India’s largest conglomerate—has reportedly started work on the merger of budget carrier AirAsia India with Air India’s low-cost airline Air India Express in a bid to attain synergies and reduce operational costs.
Worth mentioning here is that this first move to consolidate its control and form a single company in such a short duration as Tatas took control of AirAsia India by increasing its stake to 84 per cent from 51 per cent. Tata is yet to conclude negotiations with Singapore Airlines (SIA) on combining the schedules of Vistara and Air India, people with knowledge of the matter told ET. Tata has a 51 per cent stake in Vistara and SIA holds the rest.
The financial daily quoted one of the persons as saying, “This is the most logical move at this stage and with Tata owning a majority in Air Asia, the integration is easier. With many experts on deck, this integration will help the group swiftly set up the single airline structure it has been planning for a while.”
More importantly, the Mumbai-based cars-to-coffee conglomerate had roped in integration experts to create a single aviation company, given the complexities involved in combining multiple organisational structures.
