Tata Group plans to pump in $50 million in AirAsia India: Report

Tata Group is planning to pump in as much as $50 million as emergency funding in Malaysia's flagship budget carrier AirAsia Group Bhd to keep it flying in India, according to a report by Mint.

The funding could be infused via debt and equity route. The move may push Tata Group's stake in Air Asia India beyond 51 per cent, sources told the publication.

“The Tata Group will remain invested in AirAsia India though it may seek out a suitable partner to invest in the airline in the future," the report cited a source as saying. It also added that the Tata Group "is looking beyond the pandemic when it comes to the aviation sector."

The Tata Group believes that the domestic aviation market will come back strongly and that there is clearly enough space in the market for a domestic low-cost carrier, the source added.

Last week, the Malaysian parent, which owns a 49% stake in AirAsia India, had hinted that it could exit India. It had stated that it was reviewing its investment in a joint venture airline there.

The AirAsia Group had said in a statement that its operations in India, like those of its now-shuttered Japan business, have been draining cash and adding to the group's financial stress.

Group Chief Executive Officer Tony Fernandes told Reuters in September that the group intends to consolidate and strengthen its Asean foothold, which could mean one day exiting both Japan and India.

(With inputs from agencies)