Air India sale | Non-compete clause with AirAsia may hinder Tata Sons to bid: Report
Tata Sons owns a majority stake (51 percent) in the JV, while AirAsia Berhad owns the remaining holding.
Jan 30, 2020 / 09:33 AM IST
Tata Sons and Malaysia-based AirAsia Berhad are working on ironing out their differences over a non-compete clause signed for their joint venture AirAsia India, Business Standard reported.
The non-compete clause might hinder Tata Sons from bidding for divestment-bound Air India, the report added. The government formally began the bidding process for the national carrier on January 27.
The differences between the two companies is a precursor to AirAsia exiting the JV, a source told the publication.
Tata Sons owns a majority stake (51 percent) in the JV while AirAsia Berhad owns the remaining holding.
“The two groups are in talks to sort out all the pending issues,” another source told the paper.
Moneycontrol could not independently verify the story.
Spokespersons for Tata Sons and AirAsia Berhad declined to comment when approached by Business Standard.
The exclusivity agreement between the two airlines specifically bars them from engaging directly or indirectly in the low-cost aviation space.
If Tata Sons were to bid for Air India, budget airline Air India Express will clash directly with AirAsia India.
The differences between the two groups comes at a time when the Enforcement Directorate (ED) is investigating AirAsia chief executive Tony Fernandes and other senior executives on charges of money laundering.
The Central Bureau of Investigation (CBI) had registered the first information report (FIR) in May 2018, following which the ED began its probe into the allegations.