Tata Group already owns an 83.67% stake in the carrier, and Air India will acquire the remaining interest for 1.5 billion rupees (US$18 million) from Malaysian airline group Capital A in a deal announced yesterday. Capital A will focus its resources on Southeast Asia going forward.

The plan is to merge AirAsia India with LLC operator Air India Express by the end of 2023, with all services to be offered under the Air India Express brand.

The deal comes as Tata moves to consolidate its group airlines. In January, Tata completed its purchase of former national carrier Air India.

The Competition Commission of India, equivalent to the US Federal Trade Commission, has approved the new plan for Air India to purchase all shares of AirAsia India.

IndiGo, a low-cost carrier, accounted for 58% of the domestic air passenger market share in the July-September quarter.

Domestic airline Vistara was next with 9.9% of the market, with Air India and AirAsia India following.

Tata jointly owns Vistara with Singapore Airlines.

The Singapore carrier said in October that it is considering a potential merger between Vistara and Air India.