Air India and Vistara have told the Competition Commission of India (CCI) that their merger will not affect competition as rivals operate on most routes that the combined entity will fly.
Air India and Vistara have told the Competition Commission of India (CCI) that there will be no adverse impact on competition due to their merger as rivals are present on most routes that the combined entity will fly, said people with knowledge of the matter.
The people cited above told ET that while CCI's scrutiny is unlikely to have any material impact on the business of the airlines, it could affect the timeline of the merger.
As the Tata Group plans to put its airlines in sync with each other and consolidate operations, it has come under the regulator's lens. Thus, the two airlines have not been given the expedited permissions sought by them. Moreover, the regulator has asked the two airlines why an investigation of the impact the merger would have on the industry not be conducted, the report said.
A person aware of the matter was quoted in the ET report as saying, “Antitrust regulators around the world examine the impact on competition through an origin and destination (O&D) approach to identify relevant market.”
The Tata Group is merging Vistara with Air India to create a single full-service airline. Singapore Airlines will have a 25.1 per cent share in the new entity. On the other hand, AirAsia India is moving forward with the process of merging with Air India Express to create a single low-cost subsidiary of Air India.
Elaborating on the merger, Air India told the CCI that a full-service and a low-cost airline are not different. They operate from the same airports and use fuel that costs the same, pay similar landing and parking charges as well. Post-merger, Air India will be the only full-service airline operating out of India.
Source: Business Standard
