Tata Sons to shift 4 group airlines under one office roof in Gurgaon

It will lease office space of 70,000 square feet to 'optimise resources, increase team work'.

Tata Sons has started integrating its four airlines--Air India, Air India Express, Vistara, and AirAsia India--and ground handling firm AISATS by moving them into a single office.

Sources said the group has identified a place in Gurgaon where it will lease 70,000 square feet of office space. “To optimise resources, increase team work and have higher synergies at work, it has been decided to shift the various entities under a single roof in Gurgaon in a phased manner,” said a person aware of the development.

A team from Tata Realty, the group’s real estate firm, is working on the office project led by its Managing Director and CEO Sanjay Dutt. Consultancy firm EY is an advisor for the project.

Air India is headquartered in Airlines House in Central Delhi after shifting in 2013 from Nariman Point Building at Mumbai. Air India Express, the airline’s low cost subsidiary, is based in Kochi.

AirAsia India is based in Bengaluru and Vistara, a joint venture with Singapore Airlines, is in Gurgaon.

Under a share purchase agreement, the group has the right to use Air India’s office space for six months and it will have to pay rent to the government after that.

“The group wants to start the integration fast and intends to complete the process in next two to three months,” the person quoted above said.

Tata Sons chairman N Chandrasekaran had earlier said that there is a need to consolidate the group’s airline ventures in order to gain market share and make the business more profitable. Both AirAsia India and Vistara have been in losses since inception.

Together with Air India, Air Asia India and Vistara the group will have a 24.5 percent share of the domestic market- only behind market leader IndiGo which has 54 percent share.

Last week, Tatas restructured the Air India board when functional directors of the airline stepped and executives from various Tata group companies took charge.

The new owners have also started renegotiating multiple contracts of the airline to bring down the cost of operations while starting the work for a merger of AirAsia India and Air India Express- the budget carrier of state-owned Air India that the conglomerate has bought from the government.

As part of that Air Asia India has been converted into a private limited company which is going to benefit the group in taxation during the merger. Sources said that it is in final stages of signing a contract with booking platform provider Navitaire which will host its integrated low cost business of integrated Air India Express and AirAsia India.

The Tatas own 84 percent in AirAsia India, and sources said that the group will buy out the remaining 16 percent stake from Malaysia’s AirAsia Bhd soon.