Tuesday, December 08, 2020

AirAsia India in talks to return 7 planes to Malaysian parent

AirAsia India is in talks with AirAsia Berhad to return seven Airbus planes leased from the Malaysian parent, several people in the know said. 
 The move is aimed at cutting down the local airline’s exposure to the parent, even as discussions progress for the Malaysian low-fare carrier to exit the joint venture with Tata Sons. The Indian salt-to-software conglomerate owns 51% of AirAsia India and the rest is held by AirAsia Berhad. 
Top executives at the Malaysian airline have publicly expressed the company’s intention of exiting the Indian JV as part of a larger plan to quit loss-making businesses. AirAsia India has 32 planes. To be sure, the airline is expanding its own fleet and plans to induct five Airbus A320 planes in the next few months, said one of the people. 
Talks for returning the seven aircraft have been ongoing for the last few months, he added. In its initial years, AirAsia India, like AirAsia Berhad’s other affiliates, leased planes from the Malaysian parent through the latter’s wholly owned subsidiary, AirAsia Aviation Capital. 
The leasing company was sold in 2018 to BBAM. In the last few years, all of AirAsia India’s planes have been leased from other companies, chosen through a tender process. Under usual leasing contracts, premature return of leased planes entails penalties. ET couldn’t ascertain if the return of the seven planes too would attract charges. AirAsia Berhad has been in talks with Tata Sons to exit the airline. The Indian group is the only parent still investing in the JV, which if done by issuing fresh shares will continue to dilute AirAsia Berhad’s share in the venture. 
 08/12/20 Anirban Chowdhury/Economic Times
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