Let us tell you that in the year 1932 JRD Tata laid the foundation of Air India and in 1946 it was nationalized. Initially, it was called Tata Airlines and after nationalization, it was renamed as Air India in 1948. Now this airline can go back to the Tata house. Tata Group is trying to make the plan a success. Its plans include the merger of Air Asia India (Tata’s 51% stake in it) and Air India Express, a 100% subsidiary of Air India.
There are also reports that the Tata Group has also approached Malaysian entrepreneur Tony Fernandes, who holds a 49% stake in Air Asia, for approval to buy Air India Express. According to the shareholder agreement, if Fernandes is not ready, the Tata group cannot invest more than 10% in any other budget airlines.
Air Asia awaits approval for foreign flight
According to sources familiar with the matter, a new agreement could be signed soon. Tata group has proposed the merger of Air Asia and Air India Express. The source said, “This merger will lead to a large share of Fernandes in the Indian aviation sector, hence the winning scene for both partners.”
Air Asia was launched in 2013 under a joint venture between the Tata Group and Fernandes. Tata operates another full-service carrier Vistara, a joint venture with Singapore Airlines. Tata Group holds a 51% stake in it. Recently, Tata Sons chairman N Chandrasekaran had said, “We cannot run a third airline without merger”. Together with Air India and Vistara, the Tata Group can get a monopoly in the full-service space.
Where are AI Express and Air Asia?
Air India Express flies to 20 Indian cities. In addition, it also has a presence in 13 international destinations in the Gulf and South Asian countries. It has 25 Boeing 737s in its fleet, while in the case of Air Asia, it has 29 Airbus A320 and it serves 21 cities.
Obstacles in clearance for foreign flights
Air Asia India is awaiting permission for foreign flights. The wait may be longer as Fernandes, Tata Nominee R. Venkataraman on the Air Asia board, is facing criminal conspiracy and money laundering cases. Fernandes is summoned by the ED on 5 February.
It is not clear at present whether Fernandes or Air Asia India will be part of the Tata-Singapore Airlines Alliance bid for Air India. The case going on against them could be the reason for this.