AirAsia to cut India stake to 13%, Tata mulls mega carrier

AirAsia Group plans to cut its stake in AirAsia India from 49% to just 13%, unnamed sources have told The Times of India, giving joint venture partner Tata Sons a significantly greater hold over the airline.

However, the low-cost carrier will continue to use the AirAsia brand for some time, together with other arrangements such as aircraft maintenance and ticketing and accounting software.

While the Malaysian group continues to run a common website for its operations in different countries, Tata Sons has started setting up a separate website for AirAsia India, according to the newspaper. The Indian conglomerate’s information technology subsidiary Tata Consultancy Services is also reportedly developing pilot and crew management software.

“It is not going to be an instant divorce but a prolonged one,” a source said.

Tata Sons and AirAsia Group continue to negotiate their differences, most notably over the sums each side is obligated to inject into their joint venture. AirAsia has said it is reviewing its investment in India after resolving to focus only on southeast Asia.

Tata is involved in another airline venture, Vistara, together with Singapore Airlines, and has also expressed interest in buying state-run Air India. While its broader airline consolidation plans are not clear, it does intend to channel the proposed acquisition of the heavily indebted flag carrier through AirAsia India and not through Vistara, as Singapore Airlines is not currently up for acquisitions in the current climate.