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The Tata Group is considering increasing its stake in AirAsia India, the airline’s group chief executive officer Tony Fernandes told Bloomberg TV India in a interview on Tuesday.
AirAsia India is a joint venture of AirAsia, the Malaysian low cost airline (49 per cent stake), Tata Sons (30 per cent) and Telesetra Tradeplace (21 per cent). AirAsia India commenced operations last June and operates five Airbus A320 planes. The airline has a market share of one per cent.
Along with AirAsia India, Tata Sons is a majority promoter in Vistara, the joint venture airline set up last year in partnership with Singapore Airlines.
Fernandes told Bloomberg TV India that the Tata Group and Telestra Tradeplace were in discussions regarding raising stake in the airline.
“We see a huge potential from Indian market and plan to have up to 10 planes by next year,” Fernandes said.
He added that the airline was keen to start foreign operations from India.
Government rules cap foreign investment in domestic airlines at 49 per cent and AirAsia India Berhad (the parent company which owns AirAsia India) would not be able to increase its stake on its own.
“As and when we have information to share, we will inform you,” a Tata Sons spokesperson said in an email response.
According to an earlier media report AirAsia India's promoters have invested about Rs 100 crore in the airline and increased the authorised capital of the company more than three times to Rs 175 crore.
AirAsia India is an associate company of Malaysian low-cost airline AirAsia Berhad which is listed on Kuala Lumpur stock exchange. In its result filing, it showed the airline's revenue stood at Rs 74 crore for March-end quarter of 2014-15.
Recently, the airline launched its northern hub at Delhi, starting flights till Bengaluru, Goa and Guwahati. The airline, which began its service from Bengaluru, has five aircrafts at present and plans to add four more by the end of this year. However, the airline may not launch its operations from Mumbai this year and plans to focus on tier-II cities.
