LONDON – Air Asia Aviation Group Limited has this week announced that it has entered into a purchase agreement to sell the last of its 16.33 percent in equity shares that it holds in AirAsia India Private Limited. The agreement has been struck with Air India Limited, a part of Tata Sons Private Limited.
This comes as Tata Sons Private Limited announced earlier this year, their plans to merge AirAsia India into its other low cost carrier that is headquartered in Kerala, Air India Express. The coming together of these 2 budget carriers will form the foundations of the Tata owned low cost airline.
The company said this in a statement upon announcement of the sale: “All customary consents and regulatory approvals have been secured. Air Asia Aviation Group Limited is expected to receive 1,556,487,800 Rupee’s (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% in Air Asia India to its fair value.”
A re-examination of objectives
AirAsia has re-examined its strategic objectives since returning to the skies post Covid-19 pandemic. With this strategic sale, it allows Air Asia to focus on its already strong network in and around the Association of Southeast Asian nations.
“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.”
“This is not the end of our relationship, but the beginning of a new one as we explore new and exciting opportunities to collaborate and enhance our synergies moving forward,” said AirAsia Aviation Group CEO, Bo Lingam.
Alongside Malaysia re-opening its Covid stricken borders to international travellers in April this year, the Malaysian arm of AirAsia has re started its flight network to India. Offering travellers a reasonably priced option to be able to experience India’s landmarks and natural beauty such as mountains and lakes.
“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. India will remain an important market for AirAsia and will continue to be served by our various airlines.”
“We will use the experience and knowledge we have gained from operating in the Indian domestic market to grow the Asean-Indian market in logistics and passenger services to a far greater extent.” Lingam continued.
As you would expect from a carrier that has been consistently named as one of the worlds best airlines in its sector, AirAsia has got its 2022 off to a good start. In the first 9 months of this year the airline has already flown more than 23 million passengers across its group network on over 171,000 flights.
Air India Express currently operates a fleet of 24 Boeing 737-800’s, whilst AirAsia India who shares 5.7% of the Indian market, fly’s an all Airbus lineup of A320 aircraft.