Tata Group, which was reportedly in talks with AirAsia’s parent company AirAsia Group Berhad last week for a $50 million emergency funding to keep the carrier flying in India, is now planning to raise its stake in AirAsia India to more than 76 per cent by 2021, Business Standard reported quoting sources familiar with the matter.
AirAsia India is a joint venture between Tata Group and Malaysia’s AirAsia Investment Ltd.
DH could not independently verify this report.
AirAsia’s Malaysian parent, which owns a 49% stake in AirAsia India, had hinted earlier this month that it may exit India. It had stated that it was reviewing its investment in a joint venture airline.
The Tata Group’s move to boost their stake will allow the company an exit route, whose India unit has been adding to the group’s financial stress. “Our businesses in Japan and India have been draining cash, causing the Group much financial stress. Cost containment and reducing cash burns remain key priorities evident by the recent closure of AirAsia Japan and an ongoing review of our investment in AirAsia India,” President (Airlines) of AirAsia Group, Bo Lingam had said.
“For the time being, AirAsia Berhad will continue to hold a minority stake but it is all but certain that it will be converted into a Tata airline,” one of the sources told the publication.
If the acquisition for Air India goes through for the Tata Group, it may consolidate AirAsia with Air India’s low-cost carrier, Air India Express, the report cited.
Even names for this new airline under the Tata Group had been floated. “Though no name has been finalised, it has been decided that the airline will display a Tata brand name. The airline will start capitalising more on the Tata brand name, which it has been unable to till now due to the presence of the AirAsia Group,” one of the people aware of the development told the publication.
On November 29, an AirAsia India spokesperson announced that the carrier plans to add three more Airbus A320 neo planes and expand operations even as the parent company put forth a gloomy outlook at the state of its operations.
(With agency inputs)