AirAsia Aviation Group Limited (AAAGL), the holding company of Capital A's airline group, informed on Wednesday that it has sold its remaining stake in the India operations of the airline to Air India, an affiliate of Tata Sons Private Limited, for about $19 million. Till recent times, Tata Sons held an 83.67 per cent stake in AirAsia India and the remaining stake was with AirAsia Investment Ltd (AAIL), which is part of Malaysia's AirAsia Group.
Launched in 2014, the company was floated as a low-cost carrier with Tata Sons having 51 per cent stake, while AirAsia Berhad owned the rest 49 per cent. Due to legal complications over ownership and effective control, the joint venture ran into rough waters. Around two years back, Tatas acquired 83.67 per cent by buying out 32.67 per cent of AirAsia Berhad for an amount of Rs 286 crore.
In a statement, the company said: “All customary consents and regulatory approvals have been secured. AAAGL is expected to receive Rs 1,556,487,800 (equivalent to $18.83 million) in gross proceeds. There will be no gain or loss on the disposal as Capital A has marked the remaining 16.33 per cent in AAI to its fair value.”
Earlier in June, the Competition Commission of India approved Air India's proposal to buy the entire equity share capital of AirAsia India to become a single airline.
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AirAsia Aviation Group has said that as it is resuming its operations post pandemic, it is re-examining its strategic objectives to focus on Asean area given its strong network and significant presence in the region, the company said in a statement.
"Since 2014, when we first commenced operation in India, AirAsia has built a great business in India, which is one of the world's biggest civil aviation markets in the world. We have had a great experience working with India's leading Tata Group," said Bo Lingam, Group Chief Executive Officer of AirAsia Aviation Group.
He added, “Covid has allowed us to re-examine our priorities, and we felt that it was best suited for AirAsia to develop an Asean-only business, where we have four great airlines– in Malaysia, Thailand, Indonesia, and the Philippines– with a much-loved brand and presence."
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Air Asia India was the fifth-largest airline in India, with a total market share of 5.7 per cent. With the takeover, the entity will have a combined 15.7 per cent share of the country's domestic passenger market.
To date, AirAsia has flown more than 171,000 flights since January 2022, carrying over 23 million passengers across the Group. AirAsia India has flown to 13 destinations pre-pandemic, with Bengaluru (BLR), Kolkata (CCU), Hyderabad (HYD), New Delhi (DEL) and Tiruchirappalli (TRZ) to name a few.
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