AirAsia gets FIPB nod for airline JV with Tatas

The Foreign Investment Promotion Board (FIPB) of the finance ministry has approved Malaysian budget carrier AirAsia's proposal for setting up a joint venture regional airline with the Tata Group and Telestra Tradeplace Pvt Ltd.

The FIPB, headed by Arvind Mayaram, secretary to the department of economic affairs (DEA), approved the proposal at its meeting in New Delhi today.

AirAsia, Tata Sons and Bhatia group firm Telestra Tradeplace will together make an initial investment of Rs80 crore ($15 million) in the proposed joint venture airline.

"AirAsia's proposal has been cleared. It is as per the policy (up to 49 per cent FDI),'' a senior government official said, adding that the partners will initially invest Rs80 crore in the airline joint venture.

Air Asia will hold a 49-per cent stake in the joint venture, Tata Sons will hold 30 per cent and Telestra the remaining 21 per cent.

The Malaysian company will manage the joint venture airline, AirAsia India, which will be based in Chennai. It will have a six-member board with two representations each from AirAsia as well as Tata Sons. One of the board seats will go to Telstra and the sixth board seat will be for a non-executive chairman.