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Photo: Bloomberg
Photo: Bloomberg

Tata group to hike stake in AirAsia India operations

  • The move to consolidate its control in AirAsia India comes at a time when the group has shown preliminary interest in acquiring state owned Air India in the ongoing divestment process.

MUMBAI : Tata Sons Ltd is increasing its stake in AirAsia India Ltd - its joint venture airline with Malaysia’s AirAsia Bhd - from 51% to as much as 84%, said one person aware of the development.

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The move to consolidate its control in AirAsia India comes at a time when the group has shown preliminary interest in acquiring state owned Air India in the ongoing divestment process.

Tata’s increasing their stake in AirAsia will be a culmination of months of talks between the two JV partners, after the covid-19 pandemic wrecked havoc on the aviation industry, leading AirAsia to seek an exit from the Indian market in order to focus on its core geographies.

Earlier in November, Mint reported that the Tata Group will provide as much as $50 million emergency funding to keep the airline afloat.

The Malaysian parent has been struggling to recover from a global slump in travel, has stopped funding the Indian operations and has hinted at exiting the market, leaving AirAsia India dependent on the Tata Group to fund the cash burn suffered during the pandemic.

In November, AirAsia Group, which owns a 49% stake in AirAsia India, had said it is evaluating its money-losing airline joint venture in India with Tata Sons Ltd in the wake of the losses caused due to the coronavirus pandemic.

The airline completed six years of operations in June and has around 2,500 employees, including 600 pilots for its fleet of 30 Airbus A320 planes.

AirAsia India, which began operations in 2014, has never reported an annual net profit despite being conservative with its growth plans.

AirAsia’s losses widened to 332 crore in the June quarter mainly due to the lockdown and travel curbs to contain the pandemic, sharply increasing from the 15.11 crore loss a year earlier.

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