AirAsia likely to get FIPB nod for Indian JV in early March
23 February 2013
The Foreign Investment Promotion Board will take a final call on the application of Malaysian budget airline AirAsia to enter the Indian skies in partnership with the Tata Group on 6 March, according to the FIPB's agenda.
AirAsia has applied to the FIPB for the go-ahead on a deal for a joint venture in which it will take a 49-per cent stake (as recently permitted by the government in its economic liberalisation programme) along with Tata Sons, which will hold 30 per cent, and Arun Bhatia's Telestra Tradeplace along with Hindustan Aviation, which will own the rest.
AirAsia chief executive officer Tony Fernandes said on Thursday the new airline was looking to start flying from this year-end with three or four planes and an initial investment of about $50 million.
The proposed joint venture would operate from Chennai and would focus on providing domestic connectivity to what in Indian marketing parlance are called tier-II and tier-III cities.
The companies concerned have already finalised the pact for the joint venture. However, as foreign companies wanting to do business in India know, they cannot expect single-window clearance despite the so-called liberalisation – every proposal has to go through multiple layers of government and bureaucracy.
After the probable FIPB approval, AirAsia would become the first foreign airline to enter the domestic aviation market.