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AirAsia planes (REUTERS)
AirAsia planes (REUTERS)

AirAsia may eventually exit India JV: Report

  • The Asean region is a core market for the airline, while India and Japan are peripheral market
  • AirAsia India, a joint venture between Tata Sons and AirAsia Berhad, reported 46% load factor and 7.8% market share in May

India and Japan are peripheral markets for Malaysian no-frills airline, Air Asia Berhad, which could at some point exit its Indian venture with the Tata Group, the carrier acknowledged, according to a recent report by Credit Suisse that quoted the airline’s chief executive Tony Fernandes.

The Asean region is a core market for the airline, while India and Japan are peripheral markets, Fernandes said during a global call arranged by Credit Suisse. “Thus he shared that while currently growing and committed, ‘we would never say that we would never exit India’. He shared that they have a good partner in Tata and are looking for an international licence. There has been market share gain in this resumed phase of flying (from 25 May)," Credit Suisse said in a report on 22 June. “However, Air Asia said that it is not thinking of adding any new planes for a quite a while. Air Asia seemed to believe that oil prices can stay low for a long while (a lot of oil) and, thus, there are limited gains from a 15% fuel saving in a low oil price environment," the report said. “Air Asia seemed willing to take second-hand capacity if need be rather than go for a new plane."

AirAsia India spokesperson was not available for comments. When contacted, a Tata Sons spokesperson said “no comments".

AirAsia India, a joint venture between Tata Sons and AirAsia Berhad, reported 46% load factor and 7.8% market share in May, after domestic operations resumed on 25 May. It carried 22,000 passengers during the period. Market leaders IndiGo, which had a 50.6% market share in May, registered 52.6% load factor, carrying 142,000 passengers.

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