AirAsia to invest in joint venture with Tata group to start airline in India

Chennai, 20 Feb 2013 (TOI): AirAsia, a leading low cost carrier based in Malaysia, is gearing up to start an airline in India in association with Tata group and Arun Bhatia of Telestra Tradeplace Ltd.

 

It has sought approval from Indian Foreign Investment Promotion Board (IFIPB) to invest 49% into the proposed joint venture. The new airline plans to start operations from Chennai.

 

The airline’s investment arm AirAsia Investment Ltd has applied for permission to invest, said a press release on Wednesday.

 

Subject to IFIPB 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.

 

The joint venture plans to operate from Chennai, Tamil Nadu focused on providing domestic tier II and tier III city connectivity.

 

Currently, AirAsia through its operations based in Thailand and Malaysia already connect Chennai, Bangalore, Tiruchirappalli, Kochi and Kolkata to Asean countries.

 

A pioneer of the low cost carrier model in Asia and currently Asia’s largest LCC with 118 aircraft and over 350 orders, AirAsia believes Indian aviation has enormous long-term growth and is expected to produce tremendous upside for first movers.

 

AirAsia 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."

 

The airline is confident that it can replicate its success across Malaysia, Thailand, Indonesia and other joint ventures.