AirAsia which is on dire need of capital injection has disposed 32.67% of its equity shares in AirAsia India Limited for RM152 million to its venture partner Tata Group bringing its shareholding to just 16.33%.
Crunching times has pressured the once ‘king or affordable flying’ regional airline to give up its very potential market India, to conglomerate Tata which was ready to fund the grounded AirAsia India. President Bo Lingam AirAsia Group called on the action as a transaction in line with its initiatives towards reducing cash utilisation for the Group. AirAsia will be using the cash to sustain its markets in other parts of Asean, particularly in Malaysia, Thailand, Indonesia and the Philippines as look into expanding to Cambodia, Myanmar and Vietnam.
AirAsia Group has been reviewing its forward business strategy regularly, including its investment in AAI. This transaction is to ensure strict cost containment for AirAsia Group in the short term, and strengthen its presence in Asean while continuing market dominance for travel from Asean to India and North Asia.
“India will remain an important market for AirAsia. TSL has been an excellent partner and we look forward to continue working closely together in other areas of growth.”
Headquartered in Bengaluru, AAI flies to 19 domestic destinations across India with 30 Airbus A320 aircraft.
Meanwhile, international services to India from Malaysia and Thailand will resume in the future after travel restrictions are lifted and borders with India are reopened. AirAsia operates over 100 weekly flights from Malaysia and Thailand to nine destinations in India.