AirAsia already connects Southeast Asia with Indian cities such as Chennai, Bangalore, Kochi and Kolkata through its operations in Thailand and Malaysia.
The Foreign Investment Promotion Board has “approved Air Asia’s proposal to enter the [domestic] civil aviation sector”, said an Indian finance ministry official, speaking on condition of anonymity.
AirAsia Group Chief Executive Tony Fernandes, a former record industry executive who took over insolvent AirAsia in 2001 and turned it into one of the aviation sector’s biggest success stories, tweeted the news was “exciting.”
“Thank you all,” he said, adding, “People and companies with good intentions to create jobs and make the life of the average man better will always win.”
AirAsia, headquartered in Kuala Lumpur, will have a 49-per-cent stake while India’s Tata Group will hold 30 per cent and entrepreneur Arun Bhatia’s Telstra Tradeplace will take the remaining 21 per cent.
The venture now has to obtain a flying licence from India’s aviation regulator, among other steps, and is aiming to start operations in May or June, the Economic Times reported.
AirAsia’s entry would mark the first by a foreign carrier in the Indian aviation sector since the government relaxed rules last September to allow overseas airlines take stakes of up to 49 per cent in domestic carriers.