Tata Group takes control of AirAsia India with 51% stake

AirAsia India has a hard journey right from the start. AirAsia India recently had management rejig with the Tata Group for the first time appointing their own CEO and COO. Sunil Bhaskaran took charge as the CEO and MD of AirAsia India in October 2018and Sanjay Kumar joined AirAsia India as the COO in December 2018.

AirAsia India has had their fair share of legal trouble ranging from flouting the Indian rules on airlines,  to allegations of money laundering. Amidst all this, AirAsia India has been continuing normal operations but without some sort of strategy. AirAsia India recently applied with the Government of India to fly overseas after inducting its twentieth aircraft in its fleet after four and a half years of operations.

But now, it looks like the Tata Group is getting serious about consolidating control over AirAsia India. According to Times of India, the Tata Group have bought shares of Venkataramanan (1.5%) and Ramadorai (0.5%), who were anyways representing the Tata Group. This will increase the Tata group’s stake to 51% with AirAsia Berhad owning the remaining 49%.

AirAsia India news

AirAsia India Shareholding pattern

With this, the Tata Group has now taken effective control of the airline for the first time since the start of operations in 2014. Looks like we may finally see an action plan for once.

AirAsia India lacks a concrete strategy. It has opted out of many destinations after being pushed out by others. But it is on AirAsia India only. You can’t expect an airline to enter a growing market by launching just a single daily flight and sustain it for long. At least add same day return flights, something which Vistara is doing, or add a few other sectors like other LCCs when they start a new destination.

AirAsia India pulled out Amritsar, Surat and Nagpur. They operated a single flight on Amritsar-Bengaluru, Surat-Bengaluru, Nagpur-Bengaluru and Nagpur-Kolkata. And with the same strategy, AirAsia India recently entered Mumbai by adding single red-eye on Mumbai-Bengaluru route.

Well with Tata Group taking steps to turnaround AirAsia India, we may see some growth at least. The nod to fly overseas may take time due to pending cases and general elections in the coming months. Or maybe, just maybe, they could take the assets and merge into Vistara?

What are your thoughts about AirAsia India?

Comments

  1. As of now, Tatas run two joint airlines in India: Vistara in partnership with Singapore Airlines and AirAsia India with Malaysia’s AirAsia. In Vistara, Tata Sons holds 51 percent stake and 49 percent of AirAsia India.

Leave a Reply

Your email address will not be published.