AirAsia Bhd sold its remaining 16.33% stake in AirAsia India to Tata-owned Air India. This follows the acquisition of a 32.7% stake by Tata from AirAsia Bhd for ₹276.29 crore in December 2020. The Malaysian group got ₹155 crore from the sale of the remaining stake as the Tata Group takes full ownership.
Following the acquisition of Air India last year, the Tata Group aims to consolidate its aviation businesses and as part of that intends to merge AirAsia India and Air India Express.
“We felt that it was best suited for AirAsia to develop an Asean-only business,” said Bo Lingam, group CEO of the AirAsia Aviation Group. “India will remain an important market for AirAsia and will continue to be served by our various airlines. We will use the experience we have gained from operating in the domestic market to grow the Asean-Indian market in logistics and passenger services to a far greater extent.”
AirAsia India’s journey started in 2014 when the Tata Group joined hands with Tony Fernandes, owner of the AirAsia Group, to enter the low-cost aviation space.
It didn’t gain too much traction in the competitive Indian market.
Besides which, the Central Bureau of investigation (CBI) filed a first information report (FIR) in 2018 alleging that Fernandes had paid bribes to speed up permission for international operations.
Air India said that a working group had been formed to evaluate and execute the integration of Air India Express with AirAsia India. The group is led by Sunil Bhaskaran, CEO and MD of AirAsia India, and Aloke Singh, CEO of Air India Express. It will report to a steering committee chaired by Campbell Wilson, CEO and MD of Air India, who will be chairman of Air India Express and AirAsia India.
New Opportunities
Wilson had told ET previously that the Air India group will be present in both full-service and low-cost segments.
