CCCS raises competition concerns over acquisition of Air India by Tata Sons’ subsidiary

Tata Sons provides air transport services in India via a joint venture with Singapore Airlines.

The Competition and Consumer Commission of Singapore (CCCS) has raised concerns over Talace Private Limited’s acquisition of Air India.

The commission explained that Talace is a subsidiary of Tata Sons Private Limited, which provides international air transport services, both passengers and cargo, in India through its joint venture with Singapore Airlines, Tata SIA Airlines Ltd better known as “Vistara.”

“Vistara also provides international air passenger transport services on, amongst others, routes from and to Singapore,” the commission said.

In particular, the Air India and Vistara will overlap in provisions the supply of  the following:

• International air passenger transport services, along with direct flights on the Singapore-Mumbai (“SIN-BOM”) route, and vice versa);
• International air passenger transport services, along with direct flights on the Singapore-Delhi (“SIN-DEL”) route, and vice versa); and 
• Air cargo transport services from Singapore to India, and vice versa.

Both airlines are likely to be each other’s closest competitor,” CCCs said, given that the two are amongst the three key market players in the Singapore-Mumbai and Singapore-Delhi routes. 

“Third-party feedback also suggests the presence of SIA as a significant competitor of Air India and Vistara,” CCCS added but underscored that it still needs to assess the extent to which SIA competes with the merged entity along the aforementioned routes.

CCCS said it will also assess further whether the competitive constraint from other airlines such as IndiGo5 would be sufficient post-transaction. 

In the meantime, involved parties were asked to offer commitments to address the potential competition concerns of the transaction raised by the commission.

The merger will proceed to a detailed further review upon CCCS’s receipt of the relevant documents from the parties.