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Business News/ Companies / News/  AirAsia may eventually exit India JV: Report
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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
  • AirAsia planes (REUTERS)Premium
    AirAsia planes (REUTERS)

    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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    ABOUT THE AUTHOR
    Rhik Kundu
    Rhik writes about the Indian economy and its crucial indicators. He is constantly navigating corporates, decoding policies, and dabbling with everything in between.
    Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
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    Published: 23 Jun 2020, 06:30 AM IST
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