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Tuesday, 23 June, 2020, 11 : 54 AM [IST]

AirAsia may exit Indian JV with Tata Group at some point: Report

India and Japan are peripheral markets for Malaysian no-frills airline, Air Asia Berhad, which could at some point exit its Indian venture with the Tata Group, the carrier acknowledged, according to a recent report by Credit Suisse that quoted the airline’s Chief Executive Tony Fernandes.

The Asean region is a core market for the airline, while India and Japan are peripheral markets, Fernandes said during a global call arranged by Credit Suisse. “Thus he shared that while currently growing and committed, ‘we would never say that we would never exit India’. He shared that they have a good partner in Tata and are looking for an international licence. There has been market share gain in this resumed phase of flying (from 25 May),” Credit Suisse said in a report on 22 June. 

“However, Air Asia said that it is not thinking of adding any new planes for a quite a while. Air Asia seemed to believe that oil prices can stay low for a long while (a lot of oil) and, thus, there are limited gains from a 15% fuel saving in a low oil price environment,” the report said. “Air Asia seemed willing to take second-hand capacity if need be rather than go for a new plane.”

AirAsia India spokesperson was not available for comments. When contacted, a Tata Sons spokesperson said “no comments”, reports Rhik Kundu in Mint.

AirAsia India, a joint venture between Tata Sons and AirAsia Berhad, reported 46% load factor and 7.8% market share in May, after domestic operations resumed on 25 May. It carried 22,000 passengers during the period. (Source: Mint)

 
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