AirAsia is entering into partnership with the Tata Group, from Mumbai, and a third investor called Telestra Tradeplace, to launch a budget Indian airline.
According to the three companies involved, India would benefit from its own low-cost airline, and have lobbied the Indian government for support to go ahead with the venture. The southern Indian city of Chennai has been chosen as the home of the new airline, should it gain approval, with AirAsia as the operator of its cheap flights to India.
The Indian government last year opened the country’s aviation industry to foreign investment, allowing investors from outside India to own stakes of up to 49 per cent in its local airlines, a move designed to bolster the industry and attract investment.
As such, AirAsia would own 49 per cent of any new budget airline developed under this partnership, with the two Indian investors splitting the remaining 51 per cent between them.
One of the companies investing, Telestra Tradeplace, is owned by Arun Bhatia, whose son Amit has close business ties with AirAsia CEO Tony Fernandes through their association with football club Queens Park Rangers, where they are both directors.
Announcing the news, Fernandes tweeted a quote from Amit Bhatia, saying, "welcome to the airline business. Dump the private jet in India. AirAsia India is the way".
As tourism in India continues to flourish, this new venture can only help to increase the number of tourists flocking to India, as it emerges as a serious player on the world tourism map.