- Monday, February 24, 2025
The development is a new challenge for the former government-run carrier which the Tata Group took over in 2022.
By: Shubham Ghosh
INDIA’S antitrust body Competition Commission of India (CCI) is looking into Air India’s planned merger with Vistara and asked the company why it should not be probed further over competition concerns, potentially delaying the process, Reuters reported citing two informed sources.
The development is a new challenge for the former government-run carrier which the Tata Group took over in 2022. The Indian airline has undertaken a massive initiative to modernise its fleet, operational systems and management of revenue.
Last November, Tata said in a bid to streamline businesses that it was merging its two full-service carriers Air India and Vistara, a joint venture of Tata Sons and Singapore Airlines Limited, to set up a bigger airline that will take on domestic airways such as IndiGo and those in the Middle East that dominate outbound traffic from India.
According to the Reuters report, the CCI raised concerns that on some routes and categories, such as business class travel, the merged entity could result in a monopoly, one of the sources said on the condition of anonymity.
The antitrust body has also issued a so-called “show cause” notice to Air India to clarify its position and they have a month to do it, the sources added.
One of the sources also said that to address CCI’s concerns, Air India could make concessions such as giving up certain routes or reducing the frequency and added that the airline is confident that the matter can be settled through recommendation of certain changes.
Vaibhav Choukse, head of competition law at India’s J Sagar Associates, said that if the CCI is not satisfied with Air India’s response or the concessions offered, it could order a “Phase II” review that can take more than three months, the Reuters report added.
That process, he said, requires “a detailed investigation where the CCI seeks comments and objections from stakeholders”, including the public, and could order changes to the merger.
He is not involved in the case.
The CCI’s note comes at a time when the industry is witnessing growing concerns about a duopoly, with a merged Air India-Vistara and IndiGo controlling more than 80 per cent of the domestic market as smaller rivals such as SpiceJet and Go First face challenges.
