Singapores competition panel raises concerns with Tatas on Air India acquisition

Singapore's competition panel raises concerns with Tatas on Air India acquisition

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Singapores competition commission on Friday said it has raised concerns with the Tata Group over its acquisition of Air India as the conglomerate now owns two of the three key airlines that operate flights on Singapore-Mumbai and Singapore-Delhi routes.

Air India, Vistara and Singapore Airlines are the three key airlines that operate on the two aforementioned routes. Vistaras 51 per cent stake is held by the Tata Group and the remaining 49 per cent is with Singapore Airlines.

Talace Private Limited, a subsidiary of the Tata Sons Private Limited, took control of Air India on January 27 after successfully winning the bid for the airline on October 8 last year.

In a statement on Friday, the Competition and Consumer Commission of Singapore (CCCS) said it has raised competition concerns with Talace Private Limited on the transaction (Tatas acquisition of Air India) based on information received from Talace and third parties.

“In particular, Air India and Vistara are two of the three key market players along the overlapping air passenger transport routes (Singapore-Mumbai and Singapore-Delhi), and both airlines are likely to be each others close (if not the closest) competitor,” the CCCS noted.

Third party feedback also suggests the presence of Singapore Airlines as a significant competitor of Air India and Vistara along the overlapping air passenger transport routes (Singapore-Mumbai and Singapore-Delhi) and the overlapping air cargo transport routes (Singapore-India), it mentioned.

“However, the CCCS needs to assess further 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 prospective partner with Vistara in the Commercial Cooperation Framework Agreement,” it noted.

The CCCS stated it also needs to assess further whether the competitive constraint from other airlines such as IndiGo would be sufficient post transaction, it mentioned.

Accordingly, the CCCS needs to further review the competition effects of the this transaction (Tatas acquisition of Air India) in greater detail, it noted.

“At this stage, the parties may offer commitments to address the potential competition concerns of the Transaction raised by the CCCS. Otherwise, the merger will proceed to a detailed further review upon the CCCSs receipt of the relevant documents from the parties,” it mentioned.

The Competition Commission of India (CCI) had on December 20, 2021 announced that it has approved Tata Groups proposed acquisition of debt-laden Air India.

The Tata Group had on May 12 announced that Campbell Wilson, CEO of Singapore Airlines low-cost subsidiary Scoot Airlines, has been appointed as the CEO and Managing Director of Air India. He is expected to take charge at Air India during the next few weeks, aviation industry sources said.

Since April, Air India chairman N Chandrasekaran, who is also the chairman of the Tata Group, has rejigged the top management of the airline, bringing in senior and middle-level executives who have worked in other companies of the Tata group such as Tata Steel and Vistara.

Air India had on June 1 reduced the eligibility age from 55 to 40 years and announced cash incentive to encourage a significant section of its employees to voluntarily retire.

(Except for the headline, this story has not been edited by The Federal staff and is auto-published from a syndicated feed.)

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