Air India has fully bought out budget carrier AirAsia India by purchasing the balance 16.3% stake held by Malaysia’s AirAsia Aviation Group in the Indian arm. The airline will now be “integrated” with Air India’s low-cost international arm Air India Express.
In a statement, Air India announced that it has signed agreements to complete the acquisition of 100% shareholding in AirAsia India (AAI) and to turn it into a subsidiary under Air India.
“An operational review process is underway with a view to ultimately integrating AAI fully with Air India Express (AIXL),” the statement added. The full integration through a “possible scheme of merger or otherwise” is expected to take nearly 12 months during which the route network of the two airlines will be synergised.
“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,” said Air India’s CEO Campbell Wilson.
Apart from the three airlines, Tata Sons also have a joint venture airline with Singapore Airlines (SIA) in Vistara and talks are on for merging it with Air India. In a recent media interaction Mr. Wilson declined to comment on the talks with SIA but indicated that the restructuring strategy could involve a low-cost model for domestic flights, and a full-service model for international ones. Vistara is a full-service carrier.
