The Indian skies are now filled with some planes which are red and white. These erstwhile AirAsia India planes without branding are operating for AirAsia India which is being merged into Air India Express. The complex merger process involves getting rid of the AirAsia India brand name usage by November 2023 as per the deal with the Tata group, which now owns AirAsia India, Air India and Air India Express along with a majority stake in Vistara, and Malaysia-based AirAsia Bhd. with which it started the Indian joint venture.
Mergers usually create behemoths but this one won’t with the combined entity having just over 50 planes, a mere 7 per cent of the total commercial fleet in India. The merger was necessitated by multiple reasons, starting with the controversy that AirAsia India got into over the years, starting with the issue of “effective control” which was resolved in favour of the airline, multiple court cases which are now withdrawn due to the merger and allegations of lobbying for removal of 5/20 rule to allow international flight services. Eventually, the airline did not benefit from the modification of the 5/20 rule as it did not fly internationally.
Airline mergers have failed
The US airline industry went into a merger mode post 9/11. United Airlines and Continental Airlines: This merger was announced in 2010 and completed in 2011. However, the merger was plagued by integration problems and labour disputes. As a result, the airlines failed to achieve the cost savings and revenue synergies that they had anticipated. In 2013, the airlines reported a combined loss of $1.6 billion.
This story is from the November 2023 edition of Cruising Heights.
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This story is from the November 2023 edition of Cruising Heights.
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