To rebuild the crumbling aviation empire, Tata Sons is working on its plan to consolidate its entire airline business under one umbrella. On 29 November, Tata Sons and Singapore Airlines (SIA) announced that it will merge its two major brands, Air India and Vistara, where SIA will invest an amount of Rs 2,059 crore in Air India as part of the transaction.
After the merger, the giant carrier could have over 15,000 employees and 218 aircraft. Vistara started flying in January 2015. AirAsia India was launched in 2014, while Air India Express started operations in 2005. In October, Vistara was the second largest carrier with a domestic market share of 9.2 per cent, behind Indigo, which had a market share of 1.2 per cent. 56.7 percent.
During the same period, Air India and AirAsia India had a domestic market share of 9.2 percent and 7.6 percent, respectively.
India’s largest conglomerate Tata Sons currently owns four airlines, Air India and its subsidiary Air India Express, with majority shares in Vistara and AirAsia India. Here is a look at Tata Sons’ acquisitions in the aviation sector.
Air India is the national carrier of India and is wholly owned by Tata Sons. The group created TALES Pvt Ltd, a special-purpose vehicle of Tata Sons, for the sale of Air India Ltd. Tata Sons won the government bid and paid Rs 18,000 crore to take over the ailing airlines last October. The government had transferred the airline to the Tata group in January this year.
Air India Express
Tata Sons also acquired Air India Express, a wholly owned low-cost subsidiary of Air India that operates in the short-haul international space with Air India, in October last year.
The low-cost carrier was launched in April 2005 with the aim of providing convenient connectivity to short-medium haul international routes in the Gulf and South East Asia at affordable fares. The airline’s target segments are Indian expatriates, budget travelers and leisure travelers.
Vistara, which is registered as Tata SIA Airlines Limited, is a joint venture between Tata Sons Private Limited and Singapore Airlines Limited. Tata Sons holds 51 per cent stake in the partnership, while Singapore Airlines holds 49 per cent.
On 9 January 2015, Vistara started its operations with the first flight from Delhi to Mumbai. In a short span of time, Vistara has rapidly expanded its footprint both in terms of network and service offerings. Vistara connects 43 destinations within and outside India, and operates over 260 flights a day with a fleet of 54 aircraft including 41 Airbus A320, 5 Boeing 737-800NG, 5 Airbus A321neo and 3 Boeing B787-9 Dreamliners .
Airasia India Limited
Launched in June 2014, AirAsia India Limited was till last month a joint venture between Tata Sons Private Limited and AirAsia Aviation Group Limited. The airline was started as a venture between Tata Sons, AirAsia and Arun Bhatia’s Telstra Tradeplace with stakes of 41.06 per cent, 49 per cent and 9.94 per cent respectively.
In 2019, the Tata group gradually increased its stake in the airline to 51 percent. The following year, in 2020, AirAsia Bhd sold a 32.67 per cent stake in AirAsia India to Tata Sons. As of the end of December 2020, Tata Sons held 83.67 per cent stake in AirAsia India.
In November 2022, AirAsia Aviation Group Limited (AAAGL), the holding company of Capital A’s airline group, said it has sold its remaining stake (16.67 per cent) in the airline’s India operations to Air India, a Tata Sons subsidiary. . Pvt Ltd, for approximately Rs 155.65 crore. Following the acquisition, the AirAsia parent company stated that AirAsia India could continue to use the ‘AirAsia’ brand name for 12 months.
It currently flies to 18 destinations in India with a fleet of 28 aircraft. According to Directorate General of Civil Aviation (DGCA) data, the airline’s domestic share stood at 5.9 per cent as of September this year.
According to DGCA data, the three airlines of the Tata group, Air India, Vistara and AirAsia India, have a total market share of 25.9 per cent.