Tatas buy out AirAsia remaining stake in JV; AirAsia India is now 100% subsidiary of AI

NEW DELHI: AirAsia India Pvt Ltd (AAIPL) is now 100% owned by the Tata Group, with the latter purchasing the remaining 16.3% stake of AirAsia Berhad reportedly for $19 million. AAIPL is now a 100% subsidiary of Air India, AAIPL MD & CEO Sunil Bhaskaran said in an internal note to employees on Wednesday.
This paves the way for AAIPL merging into Air India Express and forming a big low cost entity under the Tatas. Talks are simultaneously on between Singapore Airlines (SIA) which owns 49% of full service Vistara and Tatas (51% owner of Vistara) for merging this airline with Air India.
AirAsia Berhad said in a statement on Wednesday titled it "sells remaining equity shares in AAIPL to Air India strengthening its focus on ASEAN": "AirAsia Aviation group Ltd (AAAGL), the holding company of airline group, has entered into a share purchase agreement to sell the remaining equity shares held in AAIPL to AI, an affiliate of Tata Sons. The latest agreement comes as AirAsia returns to the skies stronger than ever since the pandemic which allowed the airline to re-examine its strategic objectives to focus on ASEAN..."
AAAGL chief Bo Lingam said: "Since 2014 when we first commenced operation in India, AAIPL has built a great business in India, which is one of the world’s biggest civil aviation markets in the world.... This is not the end of our relationship, but the beginning of a new one as we explore new and exciting opportunities to collaborate and enhance our synergies moving forward.... India will remain an important market for AirAsia and will continue to be served by our various airlines."
AAIPL had stared in 2014 as a JV low cost carrier with Tatas owning 51% and AiRAsia Berhad the remaining 49%. The JV later ran into legal hassles over the issue of substantial ownership and effective control (SOEC) as an Indian airline must have the same with the desi partner. About two years back Tatas upped their stake in AAIPL to 83.67% by buying 32.67% stake of AirAsia Bread for about $ 37.6 million (then Rs 286 crore). The remaining 16.3% was to be bought at the same pro-rata price.
Comments have been sought from AI and AirAsia Bread — including the deal value — and awaited.
This June, the Competition Commission of India (CCI) had approved acquisition of entire shareholding in AirAsia India Pvt Ltd (AAIPL) — which completed eight years on Monday — by Air India. Tatas plan to have one airline with a low cost and full service arm.
Tata Sons is bringing all its airlines under one roof at a mega seven-lakh-square-feet office in Gurgaon.