Air India CEO meets India antitrust chief on pending Vistara merger -sources

Spicejet

04/08/2023 12:26

By Aditya Kalra and Aditi Shah
       NEW DELHI, Aug 4 (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.

 (Reporting by Aditya Kalra and Aditi Shah in New Delhi; editing
by David Evans)
 ((aditya.kalra@thomsonreuters.com;))