Malaysian carrier AirAsia on Wednesday said, it is seeking approval to establish a joint venture involving unlisted Indian firms Tata Sons and Telestra Tradeplace Pvt.
"We have carefully evaluated developments in India over the last few years, and we strongly believe that the current environment is perfect to introduce our low fares," AirAsia chief executive Tony Fernandes said in a statement.
AirAsia, through its investment arm AirAsia Investment Ltd, intends to own 49 percent of the new airline, with the remaining stake held by the two Indian firms. The venture plans to operate from Chennai in southern India and provide domestic flight options, said AirAsia.
According to CNBC-TV18, Tata Sons has said that it is only an investor in the proposed venture with AirAsia and will have no operating role. It will nominate two non executive directors on board.
Amber Dubey, partner and head-aviation at KPMG finds this development extremely positive and expects more price wars and intense competition in the sector.
The news comes after the carrier denied bidding for a stake in SpiceJet last year.
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