Singapore Regulator Raises Concerns to Tata Group Over Air India Acquisition
Singapore’s competition commission said on Friday it had raised concerns with the Tata Group over its acquisition of Air India, as the conglomerate now owns two of the three major airlines that operate flights on Singapore-Mumbai routes. and Singapore-Delhi.
Air India, Vistara and Singapore Airlines are the three major airlines that operate on the two aforementioned routes. Vistara’s 51% stake is owned by the Tata Group and the remaining 49% is owned by Singapore Airlines.
Talace Private Limited, a subsidiary of Tata Sons Private Limited, took control of Air India on January 27 after successfully winning the airline’s bid on October 8 last year.
In a statement on Friday, the Competition and Consumer Commission of Singapore (CCCS) said it had raised competition concerns with Talace Private Limited over the transaction (Tata’s acquisition of Air India) based on information received from Talace and third parties.
“In particular, Air India and Vistara are two of the top three market players along the overlapping passenger air routes (Singapore-Mumbai and Singapore-Delhi), and the two airlines are likely to be the competitor close (if not the closest) to each other,” CCCS noted.
Third party comments also suggest the presence of Singapore Airlines as a significant competitor to Air India and Vistara along the overlapping passenger air routes (Singapore-Mumbai and Singapore-Delhi) and overlapping air freight (Singapore-India), he mentioned. .
“However, CCCS needs to further assess the extent to which Singapore Airlines competes with the merged entity along these routes, given that Singapore Airlines is a joint venture partner with Tata Sons in Vistara and a potential partner with Vistara in the Trade Cooperation Framework Agreement,” he noted.
The CCCS said it also needed to further assess whether competitive pressure from other airlines such as IndiGo would be sufficient after the transaction, it said.
Accordingly, the CCCS needs to further examine the competitive effects of this transaction (Tata’s acquisition of Air India) in more detail, he noted.
“At this stage, the parties may offer commitments to address potential competition concerns of the transaction raised by CCCS. Otherwise, the merger will be subject to a thorough and detailed review upon receipt by CCCS of the relevant documents from the parts,” he said. .
The Competition Commission of India (CCI) had announced on December 20, 2021 that it had approved the proposed acquisition by the Tata Group of the highly indebted Air India.
The Tata Group announced on May 12 that Campbell Wilson, CEO of Scoot Airlines, a low-cost subsidiary of Singapore Airlines, had been appointed CEO and Managing Director of Air India. He is expected to take charge of Air India over the next few weeks, aviation industry sources have said.
Since April, Air India Chairman N Chandrasekaran, who is also chairman of the Tata Group, has revamped the airline’s top management, bringing in senior and middle managers who have worked at other group companies. Tata such as Tata Steel. and Vistara.
Air India had on June 1 reduced the eligibility age from 55 to 40 and announced a cash incentive to encourage a significant portion of its employees to voluntarily retire.
(Only the title and image of this report may have been edited by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)