The Competition Commission of India approved the acquisition of the entire shareholding in Air Asia India by Air India, a wholly-owned subsidiary of Tata Sons, on Tuesday.
India had in April proposed to buy the entire equity share capital of low cost carrier AirAsia India, in which Tata has a majority stake, to merge into a single airline, according to an application with India’s competition commission.
The autos-to-steel conglomerate bought state-run carrier Air India in a $2.4 billion equity-and-debt deal, regaining ownership of what used to be India’s flagship carrier after nearly 70 years.
Tata Sons has an 83.67% stake in AirAsia India.
The CCI application was the first move by Tata to integrate its airline businesses, which also include Vistara, a joint venture with Singapore Airlines, and AirAsia India, which it operates with Malaysia’s AirAsia X Bhd.
The move marks Air Asia's exit from the Indian market after the airline failed to replicate the success it experienced in Thailand and its home market of Malaysia.
AirAsia, which entered India in 2014 through a joint venture with Tata Sons, could not make a dent in a market dominated by low-cost carriers such as Indigo and SpiceJet.
AirAsia India posted an annual loss of Rs1,532 crore in 2020, compared to a loss of Rs782 crore a year earlier.
With inputs from Reuters