Air India proposes to acquire AirAsia India

Air India has proposed to acquire the entire equity of AirAsia India. The Competition Commission of India (CCI) has also notified the proposal for Air India’s acquisition of AirAsia India.

As per the CCI notification under Section 5(a)(i)(A) and 5(b)(i)(A) of the Competition Act, 2002, the proposed combination relates to the acquisition of the entire equity share capital of AirAsia India by Air India. At present, Tata Sons (TSPL) holds 83.67 percent of the equity share capital of Air Asia India.

It further noted: “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.” Notably, both airlines are run by Tata Sons — Air India is a wholly owned subsidiary, while AirAsia India is a joint venture with Malaysia’s AirAsia, which has 16.33 percent of the shareholding.

As per the notification, Air India has submitted the relevant markets, with respect to horizontal overlaps. These are the market for domestic passenger air transport services in India, the market for provision of domestic air cargo transportation services in India, and the market for provision of charter flight services in India.

It has also additionally submitted the relevant markets involving vertical overlaps. The upstream market for ground handling services, and downstream market for passenger air transport services (including charter flight services) at the Bengaluru, Hyderabad, Delhi, Thiruvananthapuram and Mangalore airports; and the upstream market for cargo handling services at Bengaluru airport. The upstream market for cargo handling services, and the downstream markets for air cargo transportation services and charter fight services at Bengaluru airport.

The upstream market for in-flight catering services, and the downstream market for passenger air transport services (including charter flight services) in India.