Tata Group-owned Air India has signed agreements to acquire a 100% stake in AirAsia India and has commenced the process of merging with Air India Express to form a single Indian low-cost carrier.
According to a statement released by Air India on November 2, 2022, “an operational review process is underway” to ultimately integrate Air India Express and AirAsia India.
Once the merger is complete, AirAsia will be rebranded as Air India Express, Air India explained.
“Consolidation of these two airlines, both of which operate as low-cost carriers, will be undertaken as part of the restructuring roadmap that is being envisioned for the Tata group’s airline business and is expected to bring customer, revenue, cost and operational benefits through broader adoption of each airlines’ best practices, systems and routes, and the combined entity’s greater scale,” the statement continued.
“The assessment and implementation of the full integration process of Air India Express and AirAsia India, through a possible scheme of merger or otherwise and subject to necessary corporate approvals,” Air India concluded.
The merger is expected to take around 12 months and is likely to be concluded by the end of 2023.
As of November 2022, Tata Group is currently a shareholder in four Indian carriers. These are the country’s flag carrier Air India, low-cost airline Air India Express, AirAsia India, which is a joint venture between Tata Sons and Malaysia’s Air Asia Berhad, and the full-service airline Vistara.