Budget carrier AirAsia India is likely to be merged with Air India Express by the end of 2023. An operational review process is underway to integrate the two carriers, Air India said in a statement this week.

The merger news follows Malaysia-based AirAsia Aviation Group’s announcement on Wednesday that it has sold off its remaining 16.67 percent stake in AirAsia India to Tatas-owned Air India.

The agreement that will fetch AirAsia $18.83 million, also states that AirAsia India can continue to use the ‘AirAsia’ brand name for 12 months.

Aimed at having a single low-cost carrier for the Air India group, following the merger the entity will be branded as Air India Express, a statement read.

In June, Indian watchdog Competition Commission of India had approved the proposed acquisition of the entire shareholding of AirAsia India by Air India.

Following the acquisition of Air India and Air India Express in January, the Tata Group now owns four airlines — Air India, Air India Express, AirAsia India and Vistara. Vistara is a joint venture with Singapore Airlines.

In a recent interview with Skift the Vistara CEO when asked about a possible merger between the airlines under the Tata fold had said that there are certain discussions that have been happening which he is not privy to.

Commenting further on AirAsia selling off its remaining stake to Air India, Group CEO of AirAsia Aviation Group, Bo Lingam, said Covid has allowed them to re-examine priorities, and the group feels it is best suited for AirAsia to develop an Asean-only business with airlines in Malaysia, Thailand, Indonesia and the Philippines.

“We will use the experience and knowledge we have gained from operating in the Indian domestic market to grow the Asean-Indian market in logistics and passenger services to a far greater extent,” Lingam added.

Launched in 2014, AirAsia India currently flies to 18 destinations with a market share of 5.9 percent.

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Tags: air india, airasia, asia monthly, aviation, indian airlines, mergers and acquisitions, Tata Group