Tata-owned Air India to fully acquire low-cost airline Air Asia India, signs agreement

The Tata Group-owned Air India has announced to fully acquire budget Airline Air Asia India. The Indian airline said that it has signed agreements to complete the acquisition of 100 per cent shareholding in AirAsia India and to subsidiarise it under Air India. The process of acquisition will take up to 1 year and is expected to finish by the end of 2023. As per the brand, Air India will integrate the Air India Express with Air Asia India, both of which operate as low cost airlines in India. "An operational review process is underway with a view to ultimately integrating AirAsia India fully with Air India Express (AIXL)," said the airline.

Consolidation of these two airlines, both of which operate as low-cost carriers, will be undertaken as part of the restructuring roadmap that is being envisioned for the Tata Group's airline business and is expected to bring customer, revenue, cost and operational benefits through broader adoption of each airline's best practices, systems and routes, and the combined entity's greater scale, Air India said.

Air India said a working group has been formed to evaluate and execute the integration of the AI Group's low-cost operations, which will be co-led by Sunil Bhaskaran, chief executive officer and managing director, AirAsia India, and Aloke Singh, CEO, Air India Express. The working group will report to a committee chaired by Air India MD and CEO, Campbell Wilson.

The assessment and implementation of full integration process of AirAsia India and AIXL, through a possible scheme of merger or otherwise and subject to necessary corporate approvals, is expected to take approximately 12 months, with network and other synergies to be realised progressively during that period, Air India said.

Commenting on the development, Campbell Wilson, CEO and MD, Air India, said, "We are excited to initiate the creation of a single Air India Group low-cost carrier. This is a key step in the rationalisation and transformation of the Group, and we will be working closely with the management teams and staff throughout the process. We also look forward to the many new opportunities a stronger AI Group low-cost carrier will bring for customers and staff alike." 

With ANI inputs