Highlights:
- Tatas made the first effort in such a short span to consolidate its control & establish a single company by expanding its share in AirAsia India to 84% from 51%.
- Talace Pvt Ltd, a Tata group company, won the bid to purchase 100% of Air India and its subsidiary Air India Express on October 8.
- The acquisition is expected to go into effect by the end of the year, pending cabinet approval.
Tata Sons Ltd, India’s largest conglomerate’s holding company, has apparently begun work on a combination between budget carrier AirAsia India with Air India’s low-cost airline Air India Express in order to achieve synergies and decrease operational expenses.
It is worth mentioning that Tatas made the first attempt to consolidate its control and form a single company in such a short period of time by increasing its stake in AirAsia India to 84% from 51%. According to people familiar with the situation, Tata is yet to finalise negotiations with Singapore Airlines (SIA) to merge the schedules of Vistara and Air India. Tata owns 51% of Vistara, while SIA owns the other 49%.
According to one of the insiders, “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, given the challenges involved in uniting numerous organisational structures, the Mumbai-based cars-to-coffee conglomerate had hired integration specialists to form a single aviation company.
Tata Sons reclaimed control of Air India—the airline it started over 90 years ago—in October of this year, when the Centre approved its winning bid of Rs 18,000 crore to purchase 100 percent of the struggling national carrier.
Tata Sons has recently had multiple rounds of negotiations with the top management of AirAsia India and Air India to address, among other matters, employee integration and aircraft quality and safety inspections. External integration specialists were also present at these discussions.
“There is a sense of urgency to rapidly get operations off the ground and guarantee no interruptions at customer-facing points,” the daily cited one of them as saying.
