Tatas-owned Air India to take full control of AirAsia India. All you need to know

AirAsia

Indian Market
by 5paisa Research Team Last Updated: 2022-11-03T10:52:51+05:30

After initiating discussions with Singapore Airlines for a potential merger of Air India and Vistara merger, the Tata group has acquired complete control over low-cost carrier AirAsia India as its Malaysian partner has exited the venture. 

AirAsia Aviation Group has sold the remaining equity shares in AirAsia (India) to Air India, which is now owned by the Tatas. AirAsia India was a joint venture between Tata Sons and Air Asia Investment Ltd. 

How much stake do Tata Sons and AirAsia respectively own in the Indian entity?

Tata Sons owns 83.67% in the no-frills carrier and the remaining 16.33% is held by AirAsia Investment Ltd, part of Malaysia's AirAsia Group.

How much money will Air Asia receive from the stake sale?

The company expects to receive Rs 156 crore from the stake sale and there will be no gain or loss on the disposal, AirAsia said.

So, what is the Tata group expected to do now?

The Tatas are now expected to merge AirAsia India with Air India Express, the low-cost arm of Air India, which it had acquired from the government last year.

What is the difference between Air India and Air India Express?

Air India is a full-service airline operating on domestic and international routes. Air India Express focuses on short-haul international operations, especially to the Middle East from South India and elsewhere.

What has Air Asia said about the move?

Bo Lingam, Group CEO of AirAsia Aviation Group, said that since 2014, "when we first commenced operation in India, AirAsia has built a great business in India, which is one of the world's biggest civil aviation markets".

"We have had a great experience working with India's leading Tata Group. This is not the end of our relationship but the beginning of a new one as we explore new and exciting opportunities to collaborate and enhance our synergies moving forward," he said.

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