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AirAsia India gets the nod

AirAsia India gets the nod

AirAsia India gets the nod following the finance ministry’s approval of the airliner’s joint venture with Tata and Sons and Telestra Trade place. Air Asia promoted by Tony Fernandes is Asia’s largest low cost carrier in terms of fleet size. The Joint venture expressed its plans to operate from the metropolis of Chennai and offer connectivity to smaller cities. AirAsia through its Thailand and Malaysia flights already has services to Chennai, Bangalore, Kochi and Kolkata that are the main metropolises with one service also connecting Tiruchirapalli. The airliner also has operations to several south East Asian destinations as well. 

AirAsia holds 49 percent stake in the joint venture, while Tata and Sons holds 30 % and Arun Bhatia promoted Telestra Trade place holds the remaining stake in the joint venture. The Foreign Investment Promotion Board also approved of the venture’s application. Arun Bhatia’s son Amit reportedly serves on board Queen’s Park Rangers Football Team in UK with Tony Fernandes who is CEO of Air Asia.
It must be noted that this is also the first foreign investment after the center allowed overseas airlines to buy 40% percent stake in domestic carriers last year. 
The civil aviation ministry  has however sought clarification from the airline on the technicalities of application whether the Foreign Direct Investment (FDI) policy in aviation allowed a foreign airliner to invest in an Indian company. Civil Aviation Minister Ajit Singh said that he saw no major hurdles in the company’s decision to commence operations in India.
AirAsia’s proposal comes as Ethiad Airways, PJSC and Jet Airways are set to be in a close deal, with the Abu Dhabi airliner having a 24 % stake in the Indian airliner.
AirAsia  plans to commence operations with three to four planes and an estimated initial investment of Rs 30 million. As mentioned the airliner will focus more on connectivity between tier-II and tier-III destinations.  This joint venture is also set to mark the long anticipated return of  theTata group to the aviation industry. State run Air India Limited emerged from Tata Airlines in 1930. This airliner was later nationalized in 1953. 
Category : Business
Date : 07 March 2013
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