BENGALURU, (Reuters) – Tata Group’s Air India proposed buying the whole equity share capital at low-cost carrier AirAsia India in which Tata holds a majority, to combine into one airline. According to an Indian competition commission application.

In a $2.4 Billion equity-and debt deal, the autos-tosteel conglomerate purchased state-run airline Air India. This allowed them to regain ownership of India’s iconic carrier.

Tata Sons owns 83.67% of AirAsia India.

“This was on expected lines as it makes no sense for the Tata Group to own stakes in separate airlines,” said Vinamra Longani, head of operations at Sarin & Co, a law firm specialising in aircraft leasing and finance.

“The Tata Group is embarking on what may go down as one of history’s most difficult airline realignment/turbulges.”

Air India is a lucrative airline with landing slots. Tata has to improve the airline’s fleet, turn its finances around and provide better service.

“The proposed combination will not lead to any change in the competitive landscape or cause any appreciable adverse effect on competition in India,” according to the application https://www.cci.gov.in/sites/default/files/notice_order_summary_doc/C-2022-04-922.pdf with the Competition Commission of India (CCI).

Tata has made the CCI request as a first step in integrating its airline business, which includes Vistara, a joint venture of Singapore Airlines (OTC) and AirAsia India which is operated with Malaysian AirAsia X Bhd.