Singapore’s wall of antitrust over Tata’s purchase of Air India; The group owns two of the three major airlines.

Air India’s takeover by the Tata group is likely to run into a regulatory wall in Singapore and now the Indian conglomerate needs to explain that the acquisition does not violate the country’s anti-competition laws. The Competition and Consumer Commission (CCCS) of Singapore, the country’s antitrust body, observed on Friday that Air India and Vistara, a 51:49 joint venture between the Tata Group and Singapore Airlines, are two of the three major players in the market. operate flights to singapore. -Mumbai and Singapore-Delhi routes, resulting in overlapping of both air passenger and transport routes.

“The two airlines are likely to be close, if not closest, competitors,” the CCCS observed.

Section 54 of Singapore’s Competition Act, 2004 prohibits mergers that have resulted in, or could be expected to result in, competition in the country. Issues of competition under the Act arise if the merged entity will have a market share of 40% or more; or have/will have a market share between 20% and 40%, and the combined market share of the three largest firms is 70% or more after the merger.

Merging entities are not required to notify the CCCS of their merger, but they are required to conduct a self-assessment to ascertain whether a notification to the CCCS is necessary. If they are concerned that the merger has violated the Act, or is likely to be violated, they should notify their merger to the CCCS. In such cases, the CCCS will assess the impact of the merger on competition and determine whether competition in Singapore is or is likely to be significantly reduced as a result of the merger.

In October 2021, Tata Sons acquired Air India through its wholly owned entity Tales.

CCCS said it needs to further assess the extent to which SIA competes with the merged entity on these routes, as it is a joint venture partner with Tata Sons in Vistara and Vistara in the Commercial Cooperation Framework Agreement. with a potential partner.

It added that the antitrust regulator also stated that it needs to assess whether a competitive barrier from other airlines like IndiGo would be sufficient post-transaction.

“At this stage, the parties (Tales and Air India) may offer commitments to address potential competition concerns of the transaction raised by the CCCS. Otherwise, a detailed review of the merger will be conducted upon receipt of the relevant documents by the CCCS. Commitments can be offered at any time during this review,” the CCCS said.

On 6 January 2022, the CCCS accepted an application from Tales, seeking a review of whether the Air India acquisition violated Singapore’s Competition Act. It added that the antitrust body has already completed the first phase of the review.

Earlier in May, Tata Sons appointed aviation industry veteran Campbell Wilson as its CEO and managing director, months after former Turkish Airlines chairman Ilkar IC declined to take up the position. Earlier in March, Tata Sons appointed N Chandrasekaran as the chairman of Air India, a move that prompted the group to resolve several issues in the carrier following its disinvestment, including hiring of pilots, upgrading fleet and charting. gained importance as needed. Map for coexistence with other aviation enterprises of the group.