Wednesday, November 18, 2020

AirAsia may exit India, end joint venture with Tata Sons

Mumbai: Malaysian carrier AirAsia said on Tuesday that it is reviewing its India operations run in partnership with Tata Sons, signalling a possible exit from the world’s fifth largest economy, which it entered with high expectations six years ago. It also said that the India operations have been draining cash, adding to its financial troubles exacerbated by the Covid-related restrictions on global travel.

AirAsia owns 49% in the India unit, which has been unprofitable from the beginning, while Tata Sons holds the remaining share of 51%. AirAsia’s review of its India operations follows its Japanese arm filing for bankruptcy. Last month, it had ceased flying in Japan citing high challenging operating conditions.

“Our businesses in Japan and India have been draining cash, causing the group much financial stress,” said AirAsia Group president (airlines) Bo Lingam. “Cost containment and reducing cash burns remain key priorities, evident by the recent closure of AirAsia Japan and an ongoing review of our investment in AirAsia India.”

Tata Sons has the first right of refusal for the minority stake owned by AirAsia in the India venture. It is in talks to buy out the Malaysian carrier after the latter expressed its reluctance to infuse fresh funds into the India joint venture, TOI reported in its October 5 edition. AirAsia India, which has a market share of 7% and employs over 3,000 people, posted a loss of Rs 317 crore in FY20.

18/11/20 Reeba Zachariah/Times of India

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