Air Asia, Tata plan India JV
Chennai, February 21, 2013
Malaysia-based AirAsia and India's AirAsia and Tata group have announced plans to establish a joint venture domestic Indian airline.
Air Asia said its investment arm, AirAsia Investment (AAIL) has submitted an application to the Indian Foreign Investment Promotion Board (FIPB) to seek approval for AAIL to invest 49 per cent 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 India to open up the aviation sector to Foreign Direct Investment from foreign carriers.
Subject to FIPB approval, the proposed joint venture will make an application to Indian aviation regulators for the Air Operators Permit. The parties have signed a Memorandum of Agreement, said a statement.
As a pioneer of the low cost carrier (LCC) 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 potential and is expected to produce tremendous upside for first movers, it said.
The joint venture plans to operate from Chennai in 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 connects Chennai, Bangalore, Tiruchirappalli, Kochi and Kolkata to ASEAN.
AirAsia founder and group CEO Dr 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.” - TradeArabia News Service
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