AirAsia forms company for Indian venture with Tatas
01 April 2013
Malaysian budget-carrier AirAsia Berhad has incorporated an Indian company Air Asia (India) Ltd, to get its with its joint venture with Tata Group off the ground to enter the Indian country's domestic aviation sector.
The proposed airline will compete with rivals Jet Airways, Go Air, Indigo, Spice Jet and state-controlled Air India.
The company was incorporated as an ''Indian non-government company'' with its registered office in Mumbai, filing all the requisite documents including article of association, memorandum of association, airline logo and other forms with the ministry of corporate affairs.
Earlier in March, AirAsia received the approval from the country's Foreign Investment Promotion Board (FIPB) for the proposed JV with Tatas and Telestra Tradeplace Pvt Ltd, a company owned by Arun Bhatia, a close relative of steel baron Lakshmi Mittal. (See: AirAsia gets FIPB nod for airline JV with Tatas)
AirAsia will hold a 49-per cent stake in the venture, while Tata Sons will have 30 per cent and Telestra Tradeplace will hold the remaining 21 per cent.
The JV will be a re-entry for the Tata Group into the aviation sector after six decades.
Air India, formerly Tata Airlines, founded by business magnate and father of Indian civil aviation JRD Tata, was nationalised in 1953.
The initial authorised capital of the new airline is Rs 5 lakh, which the company can increase at a later stage. For comparison, the authorised capital of rivals run into hundreds of crores.
AirAsia will have an initial investment of about Rs80 crore ($14.5 million).
In a blog AirAsia chief executive officer Tony Fernandez said, ''AirAsia India Pvt has been formed. One more step. Been studying the Indian market hard. Exciting. We can make a difference."
In March, the airline won two major awards which include '2013 Low Cost Airline of the Year' award from Air Transport News (ATN) in Canada and also the inaugural 'Langkawi International Maritime and Aerospace (LIMA) '2013 Asean Low Cost Airline of the Year' award.
The final approvals required to be obtained now are a no-objection certificate from the ministry of aviation and an air transport license from the Directorate of General Civil Aviation to operate as a scheduled airline.
AirAsia and Tata Group mooted plans to start a budget domestic carrier in February, after the Indian government amended its aviation policy allowing up to 49 per cent foreign investment in Indian domestic carriers.
Last week, International Air Travel Association (IATA) urged the Indian government to revamp its aviation policy. The Association called for improving the infrastructure, cut costs and cut excessive taxes on aviation.
While speaking an aviation day seminar in New Delhi IATA director general Tony Tyler said, ''Solutions to these must be coordinated across all ministries and levels of government. That is why I have called for India to formulate a national aviation policy. The call was not for special favours or preferential treatment. But rather for a coordinated policy framework that would facilitate growth.''