Tatas-owned Air India plans to acquire no-frills carrier AirAsia India and has sought approval from the Competition Commission for the proposed deal. AirAsia India is majority-owned by Tata Sons Private Ltd with a shareholding of 83.67 per cent and the remaining stake is with AirAsia Investment Ltd (AAIL), which is part of Malaysia's AirAsia Group. Full service carrier Air India and its low-cost subsidiary Air India Express were acquired by Talace Private Limited, a wholly-owned subsidiary of Tata Sons Private Ltd, last year. Besides, Tatas operate full service airline Vistara in a joint venture with Singapore Airlines.
Tata Sons will increase its stake in budget carrier AirAsia India (AAI) to 83.67 per cent by acquiring an additional 32.67 per cent for $37.66 million from AirAsia Investment Ltd (AAIL), according to a regulatory filing. Currently, AAIL, which is a wholly-owned subsidiary of Malaysia-based AirAsia, holds 49 per cent stake in the Bengaluru-based AirAsia India. In a regulatory filing to stock exchange Bursa Malaysia, AirAsia said, "The board of directors of AirAsia wishes to announce that its wholly-owned subsidiary AAIL and Tata Sons Pvt Ltd, India, on December 29, entered into a share purchase agreement."
A new Indian airline, proposed to be launched by the Tata Group, AirAsia and another Indian investor, is likely to start operations by the fourth quarter of this year with about $50 million initial investment by the Malaysian budget carrier.
AirAsia, the largest low-cost airline in Asia, announced the JV with Tatas late February. Last month FIPB had approved the proposal.
AirAsia India began operations in June 2014.
With cash shortage and plans going awry, the AirAsia owner is looking to cash out of the venture he built with Ratan Tata in 2013.
The bench of Chief Justice N V Ramana and Justice Pradeep Nandrajog issued notices to the Centre, Foreign Investment Promotion Board and Commerce and Civil Aviation ministries and sought their responses by October 30.
The Foreign Investment Promotion Board, headed by DEA Secretary Arvind Mayaram, approved the proposal at its meeting in New Delhi.
The Federation of Indian Airlines had challenged the aviation regulator's decision this week to issue an operating permit to AirAsia India.
AirAsia has come under scrutiny since June when GMT Research issued a critical report questioning its accounts.
With its nominees on the board, Tata Sons will have the controlling stake of 51%.
BJP leader Subramanian Swamy on Friday moved the Delhi High Court seeking an order restraining the Centre from granting any approval to AirAsia for its operations in India.
At the heart of the current controversy is the government's FDI rule
Unlikely to happen in less than a year,despite the advantage of the parent airline's base.
A bench of Chief Justice N V Ramana and Justice Manmohan issued notice to Civil Aviation Ministry, DGCA and others and sought their response by October 30.
"We are waiting for any input from any quarter," Civil Aviation Secretary R N Choubey said, adding, "We have not received anything so far".
It will focus on the under-utilised airports instead of offering services in main hubs such as Mumbai and Delhi.
However, this was subject to conditions like substantial ownership and effective control of the airline being vested in Indian nationals.
'Indian aviation sector needs much more investment and new entrants.'
AirAsia India, which is using the training facilities of its parent airline AirAsia in Malaysia, plans to set up similar facilities in India in the coming years, airline sources said.
Malaysian budget airline AirAsia moved a step closer to securing permission to launch operations in India, with Civil Aviation Minister Ajit Singh on Monday saying that all issues concerning the carrier's application have been resolved.
The proposal was cleared by the Foreign Investment Promotion Board, Finance Ministry said in a statement.
The company has charted out a three step process in achieving the target
Company chief Tony Fernandes said the name of Chairman for AirAsia India board would also be disclosed soon
AirAsia recently said it would set up a 49:30:21 joint venture with the Tata Sons and Telestra Tradeplace of Indian investor Arun Bhatia to launch a new Indian airline.
DGCA asks those likely to be affected by a scheduled air operator's permit to the airline to give suggestions, objections within 30 days.
Inching closer to launch its operations, new no-frill carrier AirAsia India on Saturday took delivery of its first Airbus A-320 as it landed in Chennai after flying in from Toulouse headquarters of the European aircraft manufacturer.
The reported buyback of Temasek's 20 per cent stake in Tata Play by Tata Sons will be the third instance of Tata Group providing an exit to a foreign partner in recent years. In 2018, Tata Sons paid $1.27 billion to DoCoMo to buy back 26 per cent of the group's telecommunication venture, Tata Teleservices. This was followed by Tata Sons acquiring AirAsia Berhad's 49 per cent stake in AirAsia India in two tranches to make it a wholly owned subsidiary.
A bench of Chief Justice G Rohini and Justice Rajiv Sahai Endlaw posted the matter for hearing on Friday.
The carrier planned to bring in a plane a month from March to build a fleet of at least 10 jets by the end of the year.
Most airlines have fattened their profits, turned the corner, or cut their losses, except AirAsia India.
Recruitment and import of aircraft still to get going
An exclusive excerpt from The Tatas: How A Family Built A Business And A Nation.
Civil aviation ministry raises procedural issues in FIPB meeting.
The airline is also looking at cities in the northeast.
The controversial 5/20 rule required an airline to have five years of domestic operations and 20 aircraft in its fleet to be able to fly abroad.
Two months after launch, low-cost warrior AirAsia is expanding to uncharted routes in India.
AirAsia founder Tony Fernandes began talks with bankers to take Asia's number one budget airline private after a plunge in its stock price put $200 million worth of loans borrowed against AirAsia's shares at risk.
The infusion will help the airlines plan their next rounds of operations as easing of 5/20 norms
AirAsia says deal not violative of shareholder agreement.
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