As it continues to weather the aviation demand downturn amid the COVID-19 pandemic, the AirAsia Group announced a reduction of its stake in its Indian-based subsidiary AirAsia India.
In a filing to Bursa Malaysia, the Malaysian-based budget carrier group announced the disposal of 32.67% of its equity shares in AirAsia India held by its susbsidiary AirAsia Investment Limited (AAIL). The reduction will see the group continue to hold a 16.33% share in the carrier.
Regarding the change in stakes, it has been reported on Reuters that Tata Sons Limited - AirAsia's joint venture partner for AirAsia India - will buy 32.67% stake in a deal worth around USD $37.7 billion. As a result of the deal, Tata Sons will have a majority share in the airline with 83.67% of the Indian-based operations.
Regarding the move, AirAsia Group President Bo Lingam said: “this transaction is in line with our initiatives towards reducing cash utilisation for the Group and will allow us to use cash to grow market share in our core markets in Asean, particularly in Malaysia, Thailand, Indonesia and the Philippines as well as for our future expansion into Cambodia, Myanmar and Vietnam.”
According to Lingam, the move was part of its review of the group's business strategy while continuing its presence in India.
“India will remain an important market for AirAsia. TSL has been an excellent partner and we look forward to continue working closely together in other areas of growth,” added Lingam.
Based in Bengaluru India, AirAsia India is a joint venture by the AirAsia Group with Indian-based Tata Sons. First launched in 2014, the carrier operates flights to 19 domestic destinations with a fleet of 30 Airbus A320 jets.