AirAsia has announced plans to launch an Indian budget airline in partnership with Mumbai-based Tata and a third Indian investor, Telestra Tradeplace.
The three companies believe India is ready for a low-cost airline and are seeking approval from the Indian government.
The new carrier would be based in Chennai in southern India and would be operated by AirAsia.
The move comes after the Indian government opened up the country’s aviation industry to foreign investors in September last year.
It means companies from outside India can own up to 49% of local airlines.
Under the proposed deal, AirAsia would own 49% of the new airline, while the two Indian companies would share the remaining stake.
Tata Sons is the holding company of the multi-billion dollar Mumbai-based Tata conglomerate.
Telestra Tradeplace is an investment holding company of Arun Bhatia, whose son Amit Bhatia is a director at Queens Park Rangers Football Club, along with AirAsia boss Tony Fernandes.
On his Twitter page, Fernandes posted a comment made by Amit Bhatia which said: "Welcome to the airline business. Dump the private jet in india. Airasia india is the way".
