“We will also be investing significantly to grow the new Air India Express’ fleet, network, and market share dramatically in the coming months and years," Wilson said while welcoming staff from AirAsia India to the group.
This comes a day after AirAsia Bhd exited the Indian budget airline that carried its name, with its majority Indian partner, Tata Group’s Air India, agreeing to acquire the 16.67% stake the Malaysian carrier still owned in AirAsia India for ₹155.65 crore. According to the share purchase agreement, AirAsia India can continue to use the ‘AirAsia’ brand name for 12 months.
In a separate statement, Air India said on Wednesday that AirAsia India would be merged with Air India Express to form one single low-cost airline platform within Air India Group in about 12 months. The merged entity will be rebranded as Air India Express.
Wilson said that he will chair the boards of AirAsia India and Air India Express. Air India chief commercial officer Nipun Aggarwal, respective CEOs of AirAsia India and Air India Express Aloke Singh and Sunil Bhaskaran, Air India independent directors PR Ramesh and Alice Vaidyan will be on the boards of both airlines. Air India chief financial officer Vinod Hejmadi will remain on the board of Air India Express.
“Bringing AirAsia India into our family, merging it with Air India Express will allow us to build a much stronger low-cost carrier," Wilson said, adding that the route networks of both airlines highly complement each other.
Air India Express operates short and medium-haul routes connecting smaller Indian towns to the Gulf and Southeast Asia. The Kochi-based unit of Air India has a fleet of 24 aircraft. Together with AirAsia India, the merger will result in a fleet size of 52 aircraft and a network of more than 20 domestic and 13 international destinations.
The Tata group now has complete control of three airlines in India, including Air India, Air India Express and AirAsia India, making it easier for them to share infrastructure across the airlines and save costs. The fourth, Tata SIA Airlines, which operates as Vistara, is a 51:49 joint venture between Tata Sons and Singapore Airlines. However, the Tata Group is also exploring a potential merger of Vistara and Air India and is in “confidential discussions" with Singapore Airlines on the matter.
