The holding company for Capital A's airline group, AirAsia Aviation Group Limited (AAAGL), announced on Wednesday that it had sold its remaining interest in the airline's India operations to Air India, a subsidiary of Tata Sons Private Limited, for around $19 million. AirAsia Investment Ltd. (AAIL), a subsidiary of Malaysia's AirAsia Group, owned the remaining ownership in AirAsia India until recently. Tata Sons formerly owned 83.67 percent of the company.
Tata Sons owned 51% of the company when it was listed as a low-cost carrier in 2014; AirAsia Berhad held the remaining 49%. The joint business had legal difficulties about ownership and effective control. Approximately two years ago, Tatas bought 83.67% of AirAsia Berhad by purchasing out 32.67% of it for Rs 286 crore.
In a statement, the company said: “All customary consents and regulatory approvals have been secured. AAAGL is expected to receive Rs 1,556,487,800 (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 per cent in AAI to its fair value.”
The plan by Air India to acquire the whole equity share capital of AirAsia India and merge the two airlines received approval from the Indian Competition Commission earlier in June.
Given its robust network and large presence in the region, AirAsia Aviation Group has stated that as it resumes operations following the epidemic, it is reexamining its strategic objectives to focus on Asean.
"Since 2014, when we first commenced operations 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," said Bo Lingam, Group Chief Executive Officer of AirAsia Aviation Group.
He added, “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."
