Tata Sons has had been working on its plan to consolidate its entire airline business under a single umbrella in a bid to rebuild the falling aviation empire. On November 29, Tata Sons and Singapore Airlines (SIA) declared that it would merge two of its big brands Air India and Vistara, where SIA will invest an amount of Rs 2,059 crore in Air India as part of the transaction.
Post-merger, the behemoth carrier might have over 15,000 employees and 218 aircraft. Vistara started flying in January 2015. AirAsia India was launched in 2014, while Air India Express began operations back 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 56.7 per cent.
During the same period, the domestic market share of Air India and AirAsia India stood at 9.2 per cent and 7.6 per cent, respectively.
India’s largest conglomerate Tata Sons at present owns four airlines, Air India and its subsidiary Air India Express, along with a majority share in Vistara and AirAsia India. Here’s a look at the Tata Sons’s acquisitions in the aviation sector.
Air India
Air India is India’s national carrier and is wholly owned by Tata Sons. The conglomerate created Talace Private Limited, a Special-Purpose Vehicle of Tata Sons, for the sale of Air India Limited. Tata Sons won the government bid and paid Rs 18,000 crore to take over the ailing airlines last October. The airline was transferred by the government to the Tata Group in January this year.
Air India Express
Tata Sons also acquired Air India Express, a fully-owned low-cost subsidiary of Air India that operates in the short-haul international space, along with Air India in October last year.
The low-cost carrier was launched in April 2005, with the objective 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 travellers and leisure travellers.
Vistara Airlines
Vistara, which is registered as TATA SIA Airlines Limited, is a JV of Tata Sons Private Limited and Singapore Airlines Limited. Tata Sons holds 51 per cent stake in the partnership, whereas Singapore Airlines has 49 per cent stake.
On January 9, 2015, Vistara started its operations with a maiden flight from Delhi to Mumbai. In a short span of time, Vistara has rapidly expanded its footprint, both in terms of network and service proposition. Vistara connects 43 destinations in and outside of 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 Dreamliner.
AirAsia India Limited
Launched in June 2014, AirAsia India Limited was a JV between Tata Sons Private Limited and AirAsia Aviation Group Limited till last month. The airline was floated as a venture between Tata Sons, AirAsia and Telestra Tradeplace of Arun Bhatia, with 41.06 per cent, 49 per cent, and 9.94 per cent stakes, respectively.
In 2019, the Tata Group gradually increased its share in the airline to 51 per cent. In the following year, 2020, AirAsia Bhd sold another 32.67 per cent stake in AirAsia India to Tata Sons. By 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 that it has sold its remaining stake (16.67 per cent) in the India operations of the airline to Air India, an affiliate of Tata Sons Private Limited, for about Rs 155.65 crore. Post the acquisition, the AirAsia parent company said that AirAsia India can continue to use the ‘AirAsia’ brand name for 12 months.
It currently flies to 18 destinations in India with a fleet of 28 aircraft. As of September this year, the airline had a domestic share of 5.9 per cent, according to Directorate General of Civil Aviation (DGCA) data.
As per DGCA data, the three Tata group airlines, Air India, Vistara and AirAsia India, have a total market share of 25.9 per cent.