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Malaysian carrier AirAsia Berhad is likely to exit from AirAsia India, as the JV company has been “draining cash..”
The business in Japan and India have been “draining cash, causing the group much financial stress,” airline president Bo Lingam said in a statement on Tuesday. “Cost containment and reducing cash burns remain key priorities evident by the recent closure of AirAsia Japan and an ongoing review of our investment in AirAsia India…” he added.
AirAsia owns 49% stake in its India joint venture with TATA sons named “AirAsia India”, began operations in 2014, has never reported an annual net profit despite being very conservative with its growth plans.
AirAsia India reported a loss of ₹332 crore in the June quarter and has been in talks with partner Tata Sons to exit the business.
Tony Fernandes, the AirAsia Group CEO said to have approached TATA sons in July this year to sell stake., but the terms of joint venture mandates that Tata Sons has the right of first refusal.
AirAsia India, which has a market share of 7% and employs over 3000 people reported a loss of ₹332 crore in FY20 ended June.
Two days ago, AirAsia officially liquidated its Japan operations under “AirAsia Japan”..
AirAsia Berhad has been focusing on consolidating its home base business and winding down its subsidies one by one to overcome the current financial distress caused by COVID- Pandemic…