New Delhi (Reuters) – Air India Chief Executive Campbell Wilson has held talks with India’s antitrust head on its pending merger with sister airline Vistara, weeks after the watchdog raised concerns about market power, people familiar with the matter said.
The Competition Commission of India has been scrutinising the planned merger of Air India, which Tata Group took over last year, with Vistara, a joint venture between Tata and Singapore Airlines (SIAL.SI). The merged airline would challenge local rival and market leader, IndiGo (INGL.NS).
Sharing new details of CCI’s concerns, the first source said the watchdog’s confidential notice to the airline has raised worries about the combined entity’s market power on many international and domestic routes.
The CCI also said its initial review showed the market share of the Tata Group could be more than 50% in at least seven domestic markets, raising competition concerns, the person added.
Following a request by the company, CEO Wilson and the General Counsel of Tata Group, Sidharth Sharma, in recent days met India’s antitrust chief, Ravneet Kaur, to discuss the ongoing merger process, said two of the four sources.
Such meetings are typically held to find a way forward and assuage the CCI’s concerns, sources said, declining to elaborate further or be named as the talks are confidential.
The CCI, Tata Group, Air India and Vistara did not respond to emails seeking comment.
Reuters reported in June that the CCI has been concerned that some Air India-Vistara merged routes and categories – such as business class travel – could have a monopoly.
The “CCI has asked how Tata plans to think about pricing strategies … The (market) power they will have, how will all this affect pricing,” said the first person.
The CCI’s scrutiny comes amid growing concerns within the industry about a duopoly, with a merged Air India-Vistara and IndiGo controlling more than 75% of the domestic market as smaller rivals such as SpiceJet (SPJT.NS) and Go First struggle.
For the first half of 2023, IndiGo’s market share stood at 58%, while the Tata Group airlines, including AirAsia India, accounted for 25%.
Air India is yet to respond to CCI’s concerns, two of the sources said. Once they do, the watchdog will review their submissions to decide on the merger, or has the option to order a broader review if it’s not satisfied.
Vistara CEO Vinod Kannan said last month Air India-Vistara merger was expected to receive all regulatory approvals by April 2024.
