Tata Sons in talks to own entirety of AirAsia India – report

Tata Sons, which already has a 51% stake in AirAsia India (I5, Chennai), may buy the remaining 49% of the joint venture from cash-strapped AirAsia Group, which has been reluctant to inject fresh capital into the budget carrier, sources have told the Times of India. AirAsia Group is, as previously reported, in talks with private equity firms and both local and international conglomerates and banks in efforts to raise MYR2.5 billion ringgit (USD600 million) by the end of the year. Group chief executive Tony Fernandes has described India as a peripheral market for the company, although he also said one month ago that its AirAsia India venture would remain unchanged. In any case, Tata Sons has the right of first refusal for the minority stake. “AirAsia, because of its financial difficulties, is not keen on infusing capital into the India JV. It wants the JV to take on debt to run the operations. Tata Sons is forced to consider buying out AirAsia,” the source told the Times of India. The launch of AirAsia India had marked Tata Group’s return to aviation, a business it pioneered with Air-India (AI, Mumbai Int’l) before the flag carrier was nationalised in 1953. Tata Sons also operates the full-service carrier Vistara (UK, Delhi Int’l) in partnership with Singapore Airlines. However, AirAsia India has been unprofitable since its launch in 2014. Tata Sons declined to comment on the Times of India report.