Air India has signed agreements to complete the acquisition of 100% shareholding in AirAsia India (AAI) and to subsidize it under Air India.
An operational review process is underway with a view to ultimately integrating AAI fully with Air India Express (AIXL). Consolidation of these two airlines, both of which operate as low-cost carriers, will be undertaken as part of the restructuring roadmap that is being envisioned for the Tata group’s airline business and is expected to bring customer, revenue, cost, and operational benefits through broader adoption of each airlines’ best practices, systems and routes, and the combined entity’s greater scale.
A working group has been formed to evaluate and execute the integration of the AI Group’s low-cost operations, which will be co-led by Sunil Bhaskaran, CEO & MD, of AirAsia India, and Aloke Singh, CEO, of Air India Express. The working group will report to a committee chaired by Air India MD & CEO, Campbell Wilson.
The assessment and implementation of the full integration process of AAI and AIXL, through a possible scheme of merger or otherwise and subject to necessary corporate approvals, is expected to take approximately 12 months, with network and other synergies to be realised progressively during that period.
Mr. Campbell Wilson, CEO & MD, of Air India, commented on the development. said, “We are excited to initiate the creation of a single Air India Group low-cost carrier. This is a key step in the rationalisation and transformation of the Group, and we will work closely with the management teams and staff throughout the process. We also look forward to the many new opportunities a stronger AI Group low-cost carrier will bring for customers and staff alike.”
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