New Delhi: Air India on Wednesday said an operational review process is underway to integrate budget carrier AirAsia India with Air India Express and the merger is likely by the end of 2023.
Tata Group-owned Air India has also signed agreements for a 100 percent stake in AirAsia India. The carrier is a joint venture between Tata Sons and Air Asia Investment Ltd. Tata Sons has an 83.67% stake and AirAsia has the remaining 16.33% stake.
The merger, likely by the end of 2023, is aimed at creating a single low-cost carrier for the Air India group. After the merger, the entity will be branded Air India Express, according to the statement.
AirAsia India was launched in 2014, while Air India Express started operations as early as 2005.
The consolidation of the two low-cost carriers – AirAsia India and Air India Express – will be done as part of the restructuring plan being planned for the Tata group airline, Air India said in a statement.
“The assessment and implementation of the full integration process of AirAsia India and Air India Express through a possible scheme of merger or otherwise and subject to necessary corporate approvals are expected to take approximately 12 months, with network and other synergies being realized in a phased manner. during that period,” it read.
Currently, four airlines are part of the Tata group. They are Air India, Air India Express, AirAsia India, and Vistara. The latter is a joint venture with Singapore Airlines. The Tata group acquired Air India and Air India Express in January this year.
Malaysia’s AirAsia Aviation Group Ltd said earlier in the day that it had entered into a share purchase agreement to sell the remaining shares held in AirAsia India to Air India.
The consolidation of AirAsia India and Air India Express is expected to deliver customer, revenue, cost, and operational benefits through wider adoption of each airline’s best practices, systems, and routes and greater scale of the combined entity, Air India said in a statement.
Air India has signed agreements to complete the acquisition of a 100% stake in AirAsia India.
A task force has been formed to evaluate and integrate the Air India group’s low-cost operations, jointly led by AirAsia India MD and CEO Sunil Bhaskaran and Air India Express CEO Aloke Singh.
The task force will report to a committee chaired by Air India MD and CEO Campbell Wilson.
On the merger of the two budget carriers, Wilson said, “We are excited to begin the creation of the Air India Group’s single low-cost carrier”.
“This is a key step in the rationalization and transformation of the group and we will be working closely with the management teams and employees throughout the process.
We also look forward to the many new opportunities a stronger low-cost carrier for AI Group will bring to customers and employees alike,” he said.
In June, the Competition Commission of India approved Air India’s proposed acquisition of the entire stake in AirAsia India.
Announcing that it has signed an agreement to sell its remaining stake in AirAsia India, AirAsia Aviation Group CEO Bo Lingam said that since 2014, “When we first started operations in India, AirAsia has built a great business in India, which is one of the largest world civil aviation markets.
“We have had a great experience working with India’s leading Tata Group. This is not the end of our relationship but the beginning of a new one as we explore new and exciting opportunities to work together and strengthen our synergies going forward,” he said in a statement. separate statement.
He went on to say that the pandemic had allowed it to review priorities and “we felt it was best for AirAsia to develop an ASEAN-only business”.
The Malaysian group will continue to have airlines in Malaysia, Thailand, Indonesia, and the Philippines.
“India will remain an important market for AirAsia and will continue to be served by our various airlines. We will use the experience and knowledge gained from operating in the Indian domestic market to grow the ASEAN-India market in terms of logistics and passenger services to a much greater extent.” said the Bo Lingam.
“India will remain an important market for AirAsia and will continue to be served by our various airlines. We will use the experience and knowledge gained from operating in the Indian domestic market to grow the ASEAN-India market in terms of logistics and passenger services to a much greater extent.” said the Bo Lingam.