Air Asia -Tata JV on the cards

Neelam Mathews

Feb 21, 2013

Just when we thought the Tatas were not interested in aviation, AirAsia Berhad  through its investment arm, AirAsia Investment Ltd. (“AAIL”) has submitted an application to the Indian Foreign Investment Promotion Board (“FIPB”) to seek approval for AAIL to invest 49% into a proposed Indian joint venture together with Tata Sons Limited and Arun Bhatia of Telestra Tradeplace Pvt. Ltd.. This move comes amidst the backdrop of the September 2012 decision by the Government of India to open up the aviation sector to Foreign Direct Investment from foreign carriers, says a statement

Subject to FIPB approval, the proposed joint venture company will make an application to Indian aviation regulators for the Air Operators Permit. The parties have signed a Memorandum of Agreement that details high-level terms with regards to the proposed partnership.

Currently Asia’s largest LCC with 118 aircraft and over 350 orders, AirAsia believes Indian aviation has enormous long-term growth potential and is expected to produce tremendous upside for first movers. The joint venture plans to operate from Chennai, Tamil Nadu focused on providing domestic Tier II/Tier III city connectivity to Indian travelers. Currently, AirAsia through its operations based in Thailand and Malaysia already connect Chennai, Bangalore, Tiruchirappalli, Kochi and Kolkata to ASEAN. 

AirAsia founder and Group CEO Tony Fernandesremarked, “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.”