AirAsia’s new Indian low cost carrier


A new airline is in the midst! AirAsia, Asia's largest low cost carrier, is planning a joint venture with India's Tata Sons with investment help from Telestra Tradeplace.

Tony Fernandes said “We strongly believe that the current environment [in India] is perfect to introduce our low fares.” The group are still awaiting approval from India's Foreign Investment Promotion Board for AirAsia to take up 49% of the new airline.

India’s aviation industry was opened to foreign investors in September last year after a long period of restrictions, allowing foreign carriers to own up to 49% of local airlines. No one else has jumped on board for this yet but speculation is circling around UAE's Etihad Airways in acquiring stakes in Jet Airways.

This is not the first attempt at entering the industry for Tata as the company planned a joint venture with Singapore Airlines nearly 20 years ago now but failed for various reasons.

The Indian airline industry has been fighting the same battles of losses caused through price wars and rising fuel costs. One of India’s six main scheduled carriers – IndiGo – made a profit last year. The current deal will give Air Asia access to India’s growing market and will hopefully spur growth in the area.

Civil Aviation Minister Ajit Singh said he would have preferred Tata to set up their own airline….

What do you think? Is India ready for a low cost airline?

The World Low Cost Airlines Congress is coming around fast. For more on the congress- new routes, new revenues and new customers, click here.

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