What lies ahead for Tata Group, Vistara and AirAsia India?

By Moneycontrol

A month after the news of Tata Sons increasing its stake in AirAsia India to over 80 percent and the month when the Air India bidding process is likely to go a step ahead, the Tata group has received a pleasant surprise. The joint market share of Vistara — the group’s joint venture with Singapore Airlines — and AirAsia India — the joint venture with AirAsia Group — has touched 13.2 percent and crossed the market share of Spicejet, the second largest carrier in the country, for December.

The Tata group is often referred to as a salt-to-software conglomerate but equally criticised for relying on a single engine, TCS, to pull the entire group ahead. As in the past, while the group has a presence across multiple areas, the focus and publicity is coming in from aviation.

Not the right measure

With two Air Operating Permits, management and control structures, this may not be the right way to measure its market share but it sure does sound the bugle for the battle that the group seems inclined to take up. Aviation in India is a business where making money has been an eternal challenge and both models — full service (Vistara) and low-cost (AirAsia India) have not recorded profits since inception.

Vistara and AirAsia India started at different times, have separate joint venture partners and separate managements. More importantly, they have separate Air Operating Permits (AOP) and thus their market share or passenger numbers cannot be clubbed for the group.

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