LONDON – Tata Group is planning to raise its stake in AirAsia India (I5) to more than 76% by 2021. I5 is a joint venture between Tata Group and Malaysia’s AirAsia (AK).
According to Deccan Herald, AK’s Malaysian parent, which owns a 49% stake in I5, had hinted earlier this month that it may exit India. It had stated that it was reviewing its investment in a joint venture airline.
Tata Group’s move to boost its stake will allow the company an exit route. Its India unit has been adding to the group’s financial stress. If the acquisition of I5 goes through for the Tata Group, it may consolidate AK with Air India’s low-cost carrier, Air India Express (IX).
Statement from AirAsia Group
Bo Lingam, President of AirAsia Group, said, “Our businesses in Japan and India have been draining cash, causing the Group much financial stress. Cost containment and reducing cash burns remain key priorities evident by the recent closure of AirAsia Japan and an ongoing review of our investment in I5.”
On November 29, an I5 spokesperson announced that the carrier planned to add three more Airbus A320neo planes and expand operations even as the parent company put forth a gloomy outlook for the state of its operations.
Featured image: AirAsia Airbus A320neo. Photo: AirAsia