Tata grabs bigger slice of AirAsia and India’s airline industry

Tata Group has increased its stake in AirAsia India as it looks to increase its share of India’s airline industry.

On Tuesday the company announced it would increase its holdings in the Indian-based joint venture with AirAsia from 51% to 84%.

AirAsia, owned by Malaysian tycoon Tony Fernandes, has been scaling back its operations during the Covid pandemic.

Last week Tata also put in a bid for the country’s struggling national carrier Air India.

Tata Group is paying AirAsia around $38m (£28m) for the increased stake in the AirAsia India joint venture which began in 2014.

The deal puts the Indian conglomerate firmly in command of the budget carrier.

AirAsia has been looking to reduce its cash-burn and its Japan unit filed for bankruptcy last month.

AirAsia India has struggled to make money in a market considered to be one of the world’s toughest due to high fuel taxes and fierce competition.

It said “India is a non-core market” and the transaction would allow it to concentrate on recovery in its key markets of Malaysia, Thailand, Indonesia and the Philippines.

Aviation experts believe this acquisition could give Tata a stronger position in the sector, and help secure Air India, which has been put up for sale by the Indian government.

The Tata Group – widely known as the Tatas in India – which also owns Jaguar Land Rover, originally founded the airline in 1932 but sold its stake to the government in the 1950s.

Tata also operates the Vistara airline in partnership with Singapore Airlines.

BBC