Air India draws antitrust scrutiny on proposed merger with Vistara

India's antitrust regulator has sent a show-cause notice to Air India over its proposed merger with Vistara (Tata SIA Airlines Ltd), citing concerns about the potential harm to competition in the domestic aviation market, two people close to the matter said.

- Binoy Prabhakar

The Tata group, which acquired Air India from the government last year, has 30 days to respond to the Competition Commission of India (CCI) notice and secure approval for the merger of its airlines without a probe.

The Tata group has the option to either divest its stake in Vistara or agree to "behavioural guidelines" to address concerns about competition in the aviation sector should the CCI proceed with an investigation and then determine the merger adversely affects the local market, one of the two people said, on condition of anonymity.

In April, the Tata group sought CCI approval to merge Air India and Vistara, the conglomerate's joint venture with Singapore Airlines.