Trouble in View for MK on India-Mauritius Route

The National Company Law Tribunal (NCLT) in Chandigarh, India has recently approved the merger of Air India, owned by Tata Sons, with Vistara.

This decision enabled the two airlines to integrate their networks, human resources, and fleet deployments. The merger aiming to create a dominant full-service airline, may redefine the dynamics of the aviation market both domestically and internationally.

The development raised questions about the impact of this merger on existing agreements and increased competition on the India-Mauritius route, particularly for Air Mauritius (MK).

MK, which has an agreement with Vistara and Air India, must now consider the implications of this merger.

The company’s employees are concerned about the effects of this merger on existing agreements and the increased competition on the route.

With IndiGo confirming its entry into the India-Mauritius market through an agreement with Air Mauritius, concerns have been raised among MK employees about the implications of this merger on existing agreements and the increased competition on the route.

The Indian government’s decision to revise the air services agreement between India and Mauritius in 2022 has resulted in two designations being allocated to Indian operators, Air India and Vistara, to operate on the Mauritius route.

Since March 26, 2023, Air India has been operating five flights a week between its Mumbai-Chhatrapati Shivaji Maharaj hub and Sir Seewoosagur Ramgoolam Airport in Mauritius, using A321LR aircraft configured for 12 business class seats, 24 premium seats, and 152 economy seats.

Vistara is competing on this route with MK, which already had an interline agreement with Air India to operate flights from Delhi via Mumbai.

The dissolution of Vistara raised critical questions about the sustainability of existing agreements and strategies to adopt in the face of increased competition.

The competitive landscape will require increased vigilance and strategic adaptation to ensure the continuity and growth of MK’s operations.

The company has already partnered with Air India through a codeshare agreement, allowing Air India to operate flights to destinations served by MK using its aircraft.

With IndiGo’s entry into the market and Vistara’s impending dissolution, which will give Air India dominance, can MK remain competitive in a already restricted and highly competitive market?

The situation, where MK is currently limited to a maximum of seven flights a week from Mumbai without restrictions on seat capacity, could have a significant impact on the airline and its position in the Indian-Mauritian market.

Singapore Airlines had announced its intention to merge Vistara and Air India in November 2022 to create a dominant full-service airline on domestic and international markets. Under the terms of the agreement, Tata Group would hold 74.9% of the merged entity, while Singapore Airlines would hold 25.1%.

In addition to the merger between Air India and Vistara, the group is also merging its low-cost carriers, Air India Express and AIX Connect (formerly Air Asia India).

Once these two mergers are completed, the Air India group will comprise a full-service airline, Air India, and a low-cost carrier, Air India Express. The merger between Air India and Vistara is expected to be completed by end-2024 or early 2025.

Source: l’Express