INSUBCONTINENT EXCLUSIVE:
AirAsia has been cutting back its investment in AirAsia India due to financial difficulties.Kuala Lumpur: Malaysian budget airline AirAsia
Group Bhd said in an stock exchange filing on Tuesday it plans to sell 32.67 per cent of its stake in its Indian operations to Tata Sons for
$37.7 million.The airline, which previously owned 49 per cent of AirAsia India as part of a joint venture with Tata Sons, said the sale
directors having considered the rationale for the transaction and after careful consideration, are of the opinion unanimously that the
operations in Japan, citing highly challenging conditions amid the pandemic.AirAsia has been cutting back its investment in AirAsia India as
the group continues to face financial difficulties.The airline is a joint venture with Tata Sons owning 83.67 per cent stake in the airline
and AirAsia Investment Limited (Malaysia) holding 16.33 per cent stake
AirAsia India started operations in India in 2014 with Bangalore as its primary hub.AirAsia is the first foreign airline to set up a
subsidiary in India and the company marked the Tata group's return to the aviation industry after 60 years, having ceded Air India in 1946
AirAsia India first began flying in 2014, with the Tata group owning 49 per cent
The carrier hoped to capture the fast-growing, low-cost market in India, similar to the model AirAsia had replicated in other regions
The partnership with Tata provided the airline with funding and strong name recognition in India.Despite this, the airline struggled to make
its mark in the Indian market, facing stiff competition from established players like IndiGo, GoAir and SpiceJet
As of November 2020, the airline only had a market share of 6.6 per cent
This puts AirAsia India second-last on the list of major domestic airlines
The low-cost currently operates a fleet of 33 aircraft, consisting of 30 A320-200s and three A320neo aircraft.
