AirAsia has applied to set up a low cost airline joint venture in India.
It has submitted an application to the Indian Foreign Investment Promotion Board (FIPB) to seek approval to invest 49% into a proposed Indian joint venture together with Tata Sons Limited and Arun Bhatia of Telestra Tradeplace Pvt. Ltd.
Tata Sons will have a 30% stake, with Mr. Bhatia holding the remaining 21%.
The move follows the September 2012 decision by the government of India to open up the aviation sector to foreign direct investment from foreign carriers.
Subject to FIPB approval, the proposed joint venture company will make an application for an Air Operators Permit.
AirAsia said in a statement that it believes Indian aviation has enormous long-term growth potential and is expected to produce tremendous upside for first movers.
The joint venture plans to operate from Chennai focused on providing domestic Tier II/Tier III city connectivity to Indian travellers.
Currently, AirAsia, through its operations based in Thailand and Malaysia, flies to Chennai, Bangalore, Tiruchirappalli, Kochi and Kolkata.
AirAsia founder and group CEO Tony Fernandes said: "We have carefully evaluated developments in India over the last few years and strongly believe that the current environment is perfect to introduce AirAsia’s low fares which stimulate travel and grow the market."
