Tata has increased its stake in an Indian based joint venture with AirAsia from 51% to 84%. AirAsia India is a joint venture between AirAsia and Tata.
Tata Group has increased its stake in AirAsia India as it increases its stake in India’s airline industry. On Tuesday, the company announced that it would increase its stake in an Indian-based joint venture with AirAsia from 51% to 84%.
AirAsia owned by Malaysian tycoon Fernandes, is withdrawing its operations during the epidemic. Last week, Tata also bid for the country’s struggling national carrier, Air India.
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The Tata group is paying approximately $ 38m (£ 28m) to AirAsia for an increased stake in the joint venture of AirAsia India started in 2014.
The deal puts the Indian group firmly under the command of the budget carrier. AirAsia is looking to reduce its cash-burn and Japan unit filed for bankruptcy last month.
Tata Sons last week filed an expression of interest to save Air India. Tata has bid for the country’s struggling national carrier Air India
AirAsia India has struggled to make money in a market that is considered one of the toughest markets in the world due to high fuel taxes and imaginary competition.
It stated that “India is a non-core market” and this transaction will allow it to focus on recovery in key markets in Malaysia, Thailand, Indonesia and the Philippines.
Aviation experts believe that this acquisition could give Tata a strong position in the region, and help secure India, which has been put up for sale by the Indian government.
The Tata group, which also owns Jaguar Land Rover, originally founded the airline in 1932 but sold its stake to the government in 1950. Tata also operates the Vistara airline in partnership with Singapore Airlines.