Malaysia's AirAsia has indicated that it could exit India as it is in the process of reviewing its venture in India with Tata Sons Ltd owing to the financial distress due to the COVID-19 pandemic.
The budget carrier said in a statement that its operations in India, like those of its now-shuttered business in Japan "have been draining cash" and causing the group much financial distress. 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," the airline said in a statement on Tuesday, November 17.
"Cost containment and reducing cash burn remain key priorities evident by the recent closure of AirAsia Japan and an ongoing review of our investment in AirAsia India," it said.
AirAsia shut its operations in Japan, the smallest of its foreign offshoots, last month.
The airline owns 49% of AirAsia India, a joint venture with Tata Sons.
The Times of India reported last month, citing sources, that Tata Sons' parent is in discussions to buy AirAsia Group's stake.
Group Chief Executive Officer Tony Fernandes told Reuters in September that the group intends to consolidate and strengthen its Asian foothold, which could mean one day exiting both Japan and India.
AirAsia Group said it remains confident of returning stronger, more robust, and faster than many competitors, given strong signs of recovery in its key domestic markets due to pent-up demand and numerous COVID-19 vaccines in near-final stages of testing.
"The general outlook is that air travel will be bouncing back real soon; we expect to get back to pre-pandemic levels on many routes across the Group by mid-2021, if not earlier," president of the group's airlines, Bo Lingam said.
AirAsia Group's share price touched its highest since June 29 on Tuesday in a second consecutive day of sharp gains, likely buoyed by news that US vaccine maker Moderna Inc's experimental vaccine is 94.5% effective in preventing COVID-19 based on interim data from a late-stage trial.