Air India’s Chief Executive, Campbell Wilson, has engaged in talks with India’s antitrust head regarding the airline’s planned merger with sister airline Vistara. The Competition Commission of India (CCI) has been closely examining the merger, which involves Tata Group’s takeover of Air India and its joint venture with Singapore Airlines, Vistara. The proposed merged entity aims to challenge the market leader, IndiGo.
Recent details of the CCI’s concerns have emerged, with the watchdog expressing worries about the combined airline’s market power on various international and domestic routes. Additionally, the CCI’s preliminary review has indicated that the Tata Group’s market share could exceed 50% in at least seven domestic markets, raising competition concerns.
In response to the CCI’s concerns, Air India’s CEO Wilson and Tata Group’s General Counsel, Sidharth Sharma, held meetings with CCI chief, Ravneet Kaur, to discuss the ongoing merger process. These meetings are an effort to address the concerns and find a way forward.
The CCI’s scrutiny comes amid industry concerns about the potential duopoly formed by a merged Air India-Vistara and IndiGo, controlling over 75% of the domestic market. Smaller rivals like SpiceJet and Go First are facing challenges as a result.
IndiGo currently holds 58% of the market share, while Tata Group airlines, including AirAsia India, account for 25% in the first half of 2023.
Air India is yet to respond to the CCI’s concerns. Once they submit their response, the watchdog will review their submissions and decide on the merger. If unsatisfied, the CCI has the option to order a broader review. Vistara’s CEO, Vinod Kannan, stated that regulatory approvals for the Air India-Vistara merger are expected to be obtained by April 2024.
