In a strategic move for the coming year, Tata Group is progressing towards the consolidation of its four airlines.
According to a TOI report, Air India Express has initiated the ‘second motion’ for a final hearing in the National Company Law Tribunal (NCLT) to merge AIX Connect (formerly known as AirAsia India) into its operations. Anticipating approval by March, this merger will result in the operation of both airlines under a single air operator certificate or license.
The larger-scale merger involving Vistara into Air India is contingent on the latter reaching a specified operational level, as communicated by Air India’s Managing Director and CEO, Campbell Wilson, in September to TOI. While the exact timeline for this merger remains undisclosed, insiders suggest it is also slated for realization in 2024.
Flight Map
Air India Express is poised to concentrate on less-saturated markets and tier II & III cities, while Air India, in addition to medium to ultra-long-haul routes, will prioritize routes with a substantial premium traffic share. The former will play a pivotal role in providing crucial connectivity to Air India’s hubs in Delhi and Mumbai, catering to the escalating number of wide-body flights spanning the globe.
Aloke Singh, CEO of Air India Express, outlined the expansion plans, saying, “With a current fleet of 62 aircraft (combining both low-cost carriers), we plan to induct 50 new Boeing 737 Max within the next 12 months. After retiring some older planes, Air India Express is expected to operate a fleet of about 98 aircraft by December.” Tata Group’s colossal order for 470 aircraft last February, which includes 190 B737 Max for its low-cost carrier, underlines its commitment to fortifying its presence in the aviation sector.
Singh emphasized the consolidation strategy, explaining, “While we will introduce new domestic and international routes, our initial focus is on strengthening our existing network. For example, when we initiated flights to Surat, we began from Delhi. Subsequently, we swiftly introduced direct flights connecting Surat to Bengaluru, Kolkata, Sharjah, and Dubai. This approach mirrors our expansion plans for Ayodhya, where we commenced flights from Delhi, followed by direct routes to Bengaluru and Kolkata.”
The Bigger Picture
In November 2022, Tata Sons kick started the process of consolidating its airline entities Vistara, AirAsia India and Air India Express under Air India, following a series of discussions with Singapore Airlines (SIA), its joint venture partner in Vistara, a move that will make Air India the second largest airline in the country in terms of fleet and market share.
The Competition Commission of India (CCI) in September last year approved the merger of Tata SIA Airlines into Air India, subject to certain conditions. The long pending merger of fully owned Tata airline Air India and sister airline Vistara, came through weeks after the watchdog raised concerns about market power.
