Air India Group this week completed an important milestone in the merger process of its two low-cost subsidiaries, Air India Express and AirAsia India. Since Monday, their reservation systems, digital websites and customer service channels have been operating as one.
See also: Tata Group becomes sole owner of AirAsia India after acquiring remaining stake
A further step in the process of integrating Air India Express and AirAsia India
The process, which involved the migration of Air India Express systems to those used by AirAsia India, is part of an overall unification programme. In the coming months, the two airlines are expected to continue integrating other internal systems and, eventually, their commercial air service operating licences.
As highlighted by Air India Group in a press release, the move will improve customer responsiveness and increase overall efficiency. With the unification, passengers can now make and manage their travel bookings on either of the two operators on a single portal.
In addition, management expects the integration to deliver cost and revenue benefits. They also plan to optimise air operations.
The merger
AirAsia India was founded in March 2013 with an initial business plan that envisaged breaking even after just one year of operations. In the beginning, ownership was split between AirAsia, Tata Group and Telestra.
Over the years, however, Tata Group acquired an increasing share and displaced Telestra. It later took over about 30% of AirAsia’s shareholding.
In 2020, it finally took control of the company, which had not made a profit since the start of its operations, and appointed executives from other companies in the industrial conglomerate to key positions, many of them with no previous experience in the industry.
Two years later, Tata Group applied to the Competition Commission of India (CCI), the country’s anti-trust authority, for approval to merge AirAsia India with Air India, which it had acquired in a 2.4 billion dollars deal. In November 2022, it became the sole owner of AirAsia India after acquiring the remaining stake.
Future of the business
While the submission to the agency mentioned that Air India will acquire AirAsia India, the operation would be run jointly with Air India Express. This would unify the operation into a single low-cost carrier operating mainly in the domestic market.
One of its main challenges is to manage a mixed fleet: AirAsia India operates Airbus A320 family aircraft, while Air India Express operates Boeing 737-800 aircraft.
See also: Air India resumes flights to Copenhagen
