Asia’s largest low-cost carrier AirAsia yesterday announced plans to invest in an airline joint venture with India’s giant Tata conglomerate and another party.
The proposal, if cleared, would be the first foreign investment in India’s aviation sector since the government last September allowed overseas airlines to take up to a 49% stake in domestic operators.
“We have carefully evaluated developments in India over the last few years and we strongly believe that the current environment is perfect to introduce our low fares,” said AirAsia’s chief executive Tony Fernandes.
The news comes after the carrier denied last year it was bidding for a stake in SpiceJet, the country’s second largest budget airline.
A statement from the airline said it had applied to India’s Foreign Investment Promotion Board for approval to take a 49% holding in the proposed joint venture with Tata Sons and independent investor Telestra Tradeplace.
The three parties have signed an agreement and will apply to the civil aviation regulator for a flying permit, it added.
The proposal would mark the Tata group’s re-entry into the aviation sector after nearly eight decades.
Former chairman J R D Tata was passionate about planes and formed Tata Airlines in the 1930s. It was later nationalised by the government to become the country’s flagship carrier, Air India.
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