Tata Sons working on merging AirAsia India and Air India Express: Report

Tata Sons has started work on merging low-fare airline AirAsia India with Air India Express, the budget carrier of state-owned Air India that the conglomerate has bought from the government. The Tata group is looking to achieve synergies and cut operational costs, the Economic Times reported on Thursday citing unnamed sources.

Tata owns 84 per cent stake in AirAsia India, allowing it to create a single airline entity quickly, the sources told the newspaper. Tata is yet to finish talks with Singapore Airlines (SIA) on integrating the schedules of Vistara and Air India said. Tata owns 51 per cent of Vistara and SIA the rest.

"This is the most logical move at this stage and with Tata owning a majority in Air Asia, the integration is easier," said one source. "With many experts on deck, this integration will help the group swiftly set up the single airline structure it has been planning for a while."

Tata Sons resumed control of Air India after bidding $2.4 billion, including equity and debt, in October, marking the end of years of struggle to privatise the financially troubled airline.