Singapore Competition Commission concerned about Tata Group’s acquisition of Air India

Singapore Competition Commission on Friday, June 3 said it has raised concerns with the Tata Group over its acquisition of Air India as the conglomerate now owns two of the three key airlines that operate flights on Singapore-Mumbai and Singapore-Delhi routes.

Air India, Vistara and Singapore Airlines are the three key airlines that operate on the two aforementioned routes. Vistara’s 51% stake is held by the Tata Group and the remaining 49% is with Singapore Airlines.

Talace Private Limited, a subsidiary of the Tata Sons Private Limited, took control of Air India on January 27 after successfully winning the bid for the airline on October 8, 2021.

Singapore Competition Commission concerned about Tata Group’s acquisition of Air India

In January this year, the commission received an application from Talace for a decision on “whether the Transaction infringes section 54 of the Competition Act 2004, which prohibits mergers that have resulted, or may be expected to result, in a substantial lessening of competition within any market in Singapore.”

In a statement on Friday, June 3 the Competition and Consumer Commission of Singapore (CCCS) said it has raised competition concerns with Talace Private Limited on the transaction (Tata’s acquisition of Air India) based on information received from Talace and third parties.

“In particular, Air India and Vistara are two of the three key market players along the overlapping air passenger transport routes (Singapore-Mumbai and Singapore-Delhi), and both airlines are likely to be each other’s close (if not the closest) competitor.

Third-party feedback also suggests the presence of Singapore Airlines as a significant competitor of Air India and Vistara along the overlapping air passenger transport routes (Singapore-Mumbai and Singapore-Delhi) and the overlapping air cargo transport routes (Singapore-India).

However, the CCCS needs to assess further the extent to which Singapore Airlines competes with the merged entity along these routes, given that Singapore Airlines is a joint-venture partner with Tata Sons in Vistara and a prospective partner with Vistara in the Commercial Cooperation Framework Agreement.”

Competition and Consumer Commission of Singapore (CCCS)

The CCCS stated it also needs to assess further whether the competitive constraint from other airlines such as IndiGo would be sufficient post transaction, it mentioned.

Accordingly, the CCCS needs to further review the competition effects of this transaction (Tata’s acquisition of Air India) in greater detail, it noted.

Vistara’s 51% stake is held by the Tata Group and the remaining 49% is with Singapore Airlines.

“At this stage, the parties may offer commitments to address the potential competition concerns of the Transaction raised by the CCCS. Otherwise, the merger will proceed to a detailed further review upon the CCCS’s receipt of the relevant documents from the parties,” it mentioned.

The Competition Commission of India (CCI) had on December 20, 2021, announced that it has approved Tata Group’s proposed acquisition of debt-laden Air India.

The Tata Group had on May 12 announced that Campbell Wilson, CEO of Singapore Airlines’ low-cost subsidiary Scoot Airlines, has been appointed as the CEO and Managing Director of Air India.

Talace Private Limited, a subsidiary of the Tata Sons Private Limited, took control of Air India on January 27 after successfully winning the bid for the airline on October 8, 2021.

He is expected to take charge at Air India during the next few weeks, aviation industry sources said.

Since April, Air India chairman N Chandrasekaran, who is also the chairman of the Tata Group, has rejigged the top management of the airline, bringing in senior and middle-level executives who have worked in other companies of the Tata group such as Tata Steel and Vistara.

ALSO READ – Vistara may merge with Air India, a decision expected by end of 2023

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