Recently, Air India Chief Executive Campbell Wilson reportedly held discussions with India's antitrust head regarding the airline's proposed merger with Vistara, its sister company. This comes after the Competition Commission of India expressed concerns about the potential market power of the merged entity and scrutinized the merger.
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The Tata Group acquired Air India last year and Vistara is a joint venture between Tata and Singapore Airlines. The merged airline could rival IndiGo, which currently leads the domestic market. The CCI has raised concerns about the new entity's market share and potential monopoly on various domestic and international routes. The watchdog's notice to the airline has reportedly raised concerns about the Tata Group's market share exceeding 50% in at least seven domestic markets.
In an effort to address these concerns and move the merger process forward, Wilson and Sidharth Sharma, General Counsel of Tata Group, met with India's antitrust chief, Ravneet Kaur. These meetings are typically confidential and held to find a way forward and address concerns. The CCI, Tata Group, Air India, and Vistara have not commented on the matter. According to reports, the CCI is concerned about pricing strategies and potential market power.
The scrutiny comes at a time when the industry is concerned about a duopoly with a merged Air India-Vistara and IndiGo controlling over 75% of the domestic market. IndiGo's market share for the first half of 2023 was 58% while Tata Group airlines, including AirAsia India, accounted for 25%. Air India has yet to respond to CCI's concerns and the watchdog will review their submissions and decide on the merger or order a broader review if necessary. Vistara CEO Vinod Kannan previously stated that the merger was expected to receive all regulatory approvals by April 2024.