Merger of AirAsia India-Air India Express likely by end of 2023, says Air India

New Delhi: Air India on Wednesday said an operational review process is underway to integrate budget carrier AirAsia India with Air India Express and the merger is likely by the end of 2023.

Tata group-owned Air India has also signed agreements to have a 100 per cent stake in AirAsia India. The carrier is a joint venture between Tata Sons and Air Asia Investment Ltd. Tata Sons has an 83.67 per cent stake and the remaining 16.33 per cent shareholding is with AirAsia.

The merger, likely by the end of 2023, is aimed at having a single low-cost carrier for the Air India group. Post-merger, the entity will be branded as Air India Express, according to a statement.

AirAsia India was launched in 2014 while Air India Express started operations back in

2005.

The consolidation of the two low-cost carriers — AirAsia India and Air India Express — will be undertaken as part of the restructuring roadmap that is being envisioned for the Tata group's airline business, Air India said in a statement.

"The assessment and implementation of the full integration process of AirAsia India and Air India Express, through a possible scheme of merger or otherwise and subject to necessary corporate approvals, is expected to take approximately 12 months, with network and other synergies to be realised progressively during that period," it said.

Currently, four airlines are part of the Tata group. They are Air India, Air India Express, AirAsia India and Vistara. The latter is a joint venture with Singapore Airlines.

Tata group acquired Air India and Air India Express in January this year.

Earlier in the day, Malaysia's AirAsia Aviation Group Ltd said it has entered into a share purchase agreement to sell the remaining equity shares held in AirAsia India to Air India.

The consolidation of AirAsia India and Air India Express is expected to bring customer, revenue, cost and operational benefits through broader adoption of each airline's best practices, systems and routes, and the combined entity's greater scale, Air India said in the statement. Air India has signed agreements to complete the acquisition of 100 per cent shareholding in AirAsia India.