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AirAsia Aviation Group Ltd. announced on Wednesday that it will sell the remaining equity shares held in low-cost carrier AirAsia India to Tata Group-owned Air India. It said that it has entered into a share purchase agreement with the automobile-to-aviation conglomerate.
“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. We have had a great experience working with India’s leading Tata Group,” said Bo Lingam, Group Chief Executive Officer, AirAsia Aviation 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,” added Lingam.
The sale announcement is followed by announcements made on December 29, 2020, and January 5, 2021, on the disposal of 32.67 per cent of the equity shares in AAI, with AAAGL receiving $37,660,000 in gross proceeds. The company also announced the disposal of the remaining 16.33 per cent of the equity shares in AirAsia to Air India Limited, an affiliate of Tata Sons.
“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,” he added.
Tata Sons acquired Air India through its wholly-owned subsidiary Talace for ₹18,000 crore in equity and debt in January this year.
AirAsia India currently flies to 18 destinations with a market share of 5.9 per cent, the airline said. Post the takeover by Tata-led Air India, the entity will have a combined 15.7 per cent share of the country’s domestic passenger market.
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