Tata Group, one of the frontrunners to acquire Air India, could be looking at the possibility of bringing all its airline ventures under a single entity.
The conglomerate has proposed to initially bring AirAsia India, the low-cost airline, under Air India if it emerges as the successful bidder for the national carrier, reported The Economic Times after speaking with top executives.
It may also look to bring full-service carrier Vistara under the combined entity if Singapore Airlines (SIA), which holds a 49 per cent share in the company, at a later stage.
As per the report, Tata Group has reached out to SIA about its plan to include their joint venture Vistara as a part of the combined airline entity to make operations more efficient.
No official comment on the matter has come from AirAsia India, Vistara and Tata Sons did not comment on the matter.
However, Tata Group is reportedly exploring plans to hire integration specialists to create a single airline entity as there would be complications involved in combining the organisational structures.
One of the people cited in the ET report said the group is clear that the strategy is to have a single airline entity if it successfully acquires Air India. Bringing the airline business under one umbrella could reduce operational costs as multiple cost structures would be eliminated.
Data from the Directorate General of Civil Aviation (DGCA) suggests that AirAsia India, Vistara and Air India together have 26 per cent share of the domestic aviation market. It is still lower than market leader IndiGo that has a market share of 57 per cent.
Following the selection, two high-level committees will decide the reserve price for the national carrier within this period. This will be one of the final steps in the Air India divestment process, following which the government will plan to complete the transaction by December.
The reserve price of the airline will be decided by an inter-ministerial group (IMG) head by the secretary of the Department of Investment and Public Asset Management (DIPAM), based on inputs from government-appointed valuers.