Kuching: AirAsia Bhd (AirAsia) is awaiting the decision from Indian Foreign Investment Promotion Board (FIPB) for the setting up of a new airline joint venture (JV) with Tata Sons Ltd (Tata) and Telestra Tradeplace Pvt Ltd (Telestra).
According to the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research), with the initial investment cost of US$30 million to US$50 million, AirAsia would hold 49 per cent stake in the new JV while Tata and Telestra would each hold 30 per cent and 21 per cent respectively.
The research house noted that AirAsia, as part of its corporate strategy, was always on the lookout for new emerging market particularly among Asian countries with high population and rising middle income group.
Both China and India were coveted markets for AirAsia future expansions. However, China’s domestic airline market was yet to be accessible to foreign players. In addition, its growing High Speed Rail network might compete with the budget airlines, it noted.
“India’s aviation market is difficult to operate due to the restriction of foreign ownerships, inconsistent regulator policies, unreasonably high airport taxes (tax rate is varying according to states) and tax levied on the usage of jet fuel,” the research house explained.
26/02/13 Borneo Post
