Less is more. At least, that’s what investors would prefer in India’s cut-throat aviation world, in terms of the number of airlines vying for a pie of the market. The good news is the first seeds of consolidation were sown last week. Tata Sons Pvt. Ltd is buying out the majority of its joint venture partner’s stake in AirAsia India Ltd for ₹276 crore. While this will raise its stake from 51% to 83.7%, there is a call option for the remaining stake held by AirAsia as well.
With reported plans to buy Air India as well, Tata group is clearly putting its money where its heart is. This is in addition to its 51% stake in the full-service carrier, Vistara. “If the Tatas successfully acquire Air India and consolidate Vistara and AirAsia India under its brand, Indian aviation will convert from a six to four-player industry comprising Tata group, IndiGo, SpiceJet and GoAir,” ICICI Securities Ltd’s analysts said in a report on 30 December.
Based on Directorate General of Civil Aviation (DGCA) data for November, if the Tatas bag Air India and eventually consolidate their aviation interests, their likely domestic market share would be 23.2%. That would make it a formidable No. 2 in the Indian aviation market.
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