AirAsia applie seeks gov’t for Indian airline with Tata group
“Malaysian carrier AirAsia on Wednesday said, it is–seeking approval to establish a joint venture involving unlisted Indian firms Tata Sons and Telestra Tradeplace Pvt.”
“We have carefully evaluated developments in India over the last few years, and we strongly believe that the current environment is perfect to introduce our low fares,” AirAsia chief executive Tony Fernandes said in a statement.
AirAsia said on Wednesday it is seeking government approval to establish a joint venture with the two companies. Tatas Sons will be the minority investor with a 30 per cent–stake and Telestra Tradeplace will hold a 21 per cent stake while the Malaysian airline will have operational control with a 49 per cent stake. The partners of the joint venture, which expects to begin operations by the fourth quarter of the current year, has yet to decide the share capital.
Founder and group CEO Tony Fernandes said, “We have carefully evaluated developments in India over the last few years and strongly believe that the current environment is perfect to introduce AirAsia’s low fares which stimulate travel and grow the market.”
Tata Sons, the holding company of the USD 100 billion salt-to-software conglomerate, will hold 30 per cent in the joint venture but will not have any operating role in the airline.
The move comes in the wake of India easing the rules on overseas investment in domestic carriers. In September, the government allowed overseas airlines to pick up a stake of as much as 49% in domestic carriers. The AirAsia proposal comes as United Arab Emirates carrier Etihad Airways PJSC is said to be close to buying a 24% stake in Jet Airways (India) Ltd.
The plan did not materialise as the government dropped disinvestment plans due to stiff political opposition.
The proposed joint venture will operate from Chennai and will focus on providing domestic connectivity to Tier-II and Tier-III cities, statement by the Malaysian carrier from its headquarters in Sepang said.
Bhatia’s son Amit serves on the Board of Directors at Queens Park Rangers Football Club in the UK alongside Tony Fernandes, the founder of AirAsia.
Amit is married to Vanisha Mittal, the only daughter of steel tycoon Lakshmi Mittal, according to the Wikipedia.
Within 11 years of its existence, AirAsia has become the largest no-frill carrier in Asia with 118 aircraft, and over 350 on order.