Phase 1 of Air India’s acquisition by Tata Sons was completed on Friday by the Competition and Consumer Commission of Singapore. Based on the information received from Talace and other third parties, the concerns about the merger have been raised by the commission. An application by Talace was sent to the commission regarding the decision on “whether the Transaction infringes section 54 of the Competition Act 2004, which forbids mergers that have resulted in, or are likely to result in, a substantial decrease of competition within any market in Singapore.”
Talace, which is a part of the parent company Tata Sons, is a private organisation assimilated solely for the transaction purpose in India. Tata Sons carries international air transport services for both cargo and passengers in India through the Vistara Airlines they own, in partnership with Singapore Airlines Ltd. Vistara Airlines is also a provider of international air passenger transportation services on various routes to and from Singapore.
CCCS must conduct a more thorough examination of the Transaction’s competitive impacts.
The Singapore Commission has noted that Vistara and India are the two airlines which overlap the supply of:
- providing air passenger transportation services on international routes, as well as direct flights between Singapore and Mumbai (SIN-BOM) (and vice versa).
- providing air passenger transport services on international routes, and direct flights on the Delhi-Singapore (“DEL-SIN”) route (and vice versa) both SIN-BOM and DEL-SIN are referred to be Overlapping transport routes of air passengers.
- Proving services of air cargo as well from India to Singapore (and vice versa) which is the overlapping of routes of Air Cargo Transportation.
Therefore, competition concerns are raised by the CCCS regarding the transaction with Talace, which was based on the information sent by Talace and other third parties. Alongside the Overlapping Air Passenger Routes of Transportation, Vistara and Air India are two of the three major market players in the aviation industry and also, the closest competitors to each other as well said the commission. The commission also added that CCCS needs to further evaluate the expanse to which the merged company and the Singapore Airlines Ltd (SIA) are competing on the above-mentioned routes as the SIA is a partner with Tata Sons for a joint venture of Vistara Airlines and also SIA is an anticipated partner with Vistara in the CCCA (Commercial Cooperation Framework Agreement).
Tata Sons carries international air transport services through the Vistara Airlines they own, in partnership with Singapore Airlines Ltd.
According to the commission, CCCS must also determine whether the competitive restraint imposed by other airlines, such as IndiGo, will be sufficient after the transaction. As a result, CCCS must conduct a more thorough examination of the Transaction’s competitive impacts. The Parties may submit promises at this time to resolve CCCS’s potential competitive concerns about the Transaction. Otherwise, it is estimated that once CCCS receives the appropriate documentation from the Parties, the merger between the companies will be subject to a rigorous further investigation, according to the commission. The company has further also added that promises could be made at any time during the review. For additional information about Singapore’s merger review process.