Tata said in November it was merging its two full-service carriers – Air India and Vistara – to create a bigger airline to take on local rivals such as IndiGo and Middle Eastern carriers that dominate outbound traffic from India.

The Competition Commission of India (CCI) has sent a so-called “show cause” notice to Air India to explain its position, expressing concern that on some routes and categories – such as business class travel – the merged entity could have a monopoly, the source said.

The CCI and Air India did not immediately respond to requests for comment. Indian media reported the notice late on Tuesday.

Vistara is a joint venture between Singapore Airlines and India’s Tata Sons, which last year took control of then state-run Air India.