The Tata Group will soon begin the process of bringing all its airline companies under the Air India brand.
It will kick things off with the transfer of its ownership in AirAsia India to Air India.
Consolidation complete by 2024
It intends to wrap up the consolidation of its entire airline business under a single umbrella by 2024.
The consolidation process is likely to start with the merger of AirAsia India into Air India Express, to be completed over the next 12 months.
Vistara merging into AI
After this, the group is likely to look at merging its full-service carrier Vistara into Air India.
Singapore Airlines (SIA) — an equity partner in Vistara could eventually partner with the Tata Group to become part-owners of Air India as well.
The process of transfer will start with making AirAsia India the subsidiary of Air India.
AirAsia merge into AI Express
Soon after, AirAsia will be merged with Air India Express.
“The integration process of the two airlines is expected to take at least 12 months from the start date,” said a source in the know.
Currently, AirAsia India is majority owned by Tata Sons, the holding company for Tata Group companies.
Entities acquired post sale
The Tata Group won a bid to own 100% in Air India after paying Rs 18,000 crore to the Union government in October last year.
The airline was transferred by the government to the Tata Group in January this year.
Along with Air India, the group also got Air India Express, a fully-owned low-cost subsidiary that operates in the short-haul international space, and a 50% stake in ground handling company AISATS.
AirAsia India acquisition
The Tata Group’s airline portfolio comprises 83.67% ownership in AirAsia India and a majority 51% holding in Vistara.
Malaysia-based AirAsia Berhad owns 16.33% in the former and SIA owns 49% in the latter.
As part of the consolidation the group will fully acquire AirAsia India by buying out AirAsia Berhad’s stake for $30 million.
The merger of Air India Express with AirAsia India will start with integration of information technology and passenger booking system.
AI Express to be low-cost subsidiary
One of the plans being discussed is to shift all aircraft with AirAsia India to Air India Express.
Going ahead, the Tata Group plans to have one Air India brand with AI Express as its low-cost subsidiary that will operate in low-cost domestic and international space.
AI Express top management (mainly the CEO) has already started operating out of the Air India head office in New Delhi.
Vihaan.AI: 5-year roadmap
Air India, under its new CEO Campbell Wilson, has outlined a five-year roadmap to transform itself as a world-class carrier while achieving a market share of 30 per cent in the domestic market.
The plan is code-named Vihaan.AI, which in Sanskrit means dawn of a new era.
It had also announced plans to induct 30 new wide-body and narrow-body aircraft.
The 30% target is huge considering the market is going to grow and so will the competition over time.
The bigger plan is to make Air India a network that operates out of hubs in India and, along with SIA, becomes one of the preferred carriers in the region and, eventually, a global airline of choice.