New Delhi: Tata group has increased its stake in AirAsia India to about 51% and, along with its partner AirAsia Investments, infused Rs 500 crore into the budget airline to fund its international growth plans, two people aware of the development told ET.
With this the group has consolidated its position in the aviation sector, holding controlling stake in two airlines — the second being Vistara that is 49% owned by Singapore International Airlines. Earlier, both Tata group and AirAsia had 49% stake each with Tata Trusts managing partner R Venkataramanan and group executive S Ramadorai holding the rest. “Stake allocation to Venkataramanan and Ramadorai was a business decision and the group now owns 51% in the airline,” one of the sources said. Documents accessed by ET show that the airline has got an infusion of Rs 500 crore on April 8, 2019, and 51% of it came from Tata group.
This is the first time since the airline’s inception in 2014 that Tata group has become the largest shareholder.
The airline was started with 49% shareholding by AirAsia Group, 30% by Tata group and 21% owned by Arun Bhatia’s Telestra Tradeplace. Bhatia exited the airline in 2016, and Tata Sons, Venkataramanan and Ramadorai bought its stake.
Tatas also took management control of AirAsia India recently with group representatives now holding key posts. Sunil Bhaskaran, a Tata Steel veteran, took over as chief executive and managing director of the airline in November last year. The earlier CEOs — Mittu Chandilya and Amar Abrol — were selected by AirAsia Berhad and its CEO Tony Fernandes.
Emails sent to the Tata group, AirAsia Berhad and AirAsia India did not elicit any response till the time of going to print on Wednesday.
Tata group is increasing stake in AirAsia India at a time when the airline and Fernandes are being investigated by the Central Bureau of Investigation for allegedly bribing government officials to get a waiver in the foreign flying eligibility norms of five years and 20 aircraft.
As space is being created in the Indian airline industry with Jet AirwaysNSE -26.86 %, caught in its worst financial crisis, cancelling most of its flights, Tata group has put in fresh funds in both its airlines. Vistara has also got a funding of Rs 900 crore from the stakeholders that will be used for international operations as well as domestic expansion.
Both Vistara and AirAsia India have applied for approvals to fly international routes.
Source: economictimes.indiatimes.com