FIPB approves AirAsia’s proposal for budget carrier JV
Malaysian carrier AirAsia's proposal to set up a new low-cost airline in a joint venture (JV) with the Tata Sons and Telestra Tradeplace Ltd's Arun Bhatia won approval from the Foreign Investment Promotion Board (FIPB) on Wednesday.
A senior Finance Ministry official, who attended the meeting, confirmed that development saying that the government cleared the proposal as it was in line with the FDI policy, which allowed foreign investment of up to 49 per cent.
The government last year allowed foreign direct investment (FDI) of up to 49 per cent in the aviation sector, in a bid to boost investment in the struggling sector.
After the announcement of the approval, AirAsia promoter Tony Fernandes wrote on Twitter, "Exciting. Thank you all... The good always wins. People and companies with good intentions to create jobs and make life of an average man better will always win."
AirAsia would be the first foreign carrier to set up an airline in Indian and to make attempt to capture the soaring demand in India's aviation sector.
AirAsia, Asia's leading low-cost airline, will make an initial investment of Rs 800 million (around $15 million) in the airline.
The Malaysian carrier will hold 49 per cent stake in the upcoming low-cost airline, Tata Sons and Arun Bhatia will own 30 per cent and 21 per cent stake, respectively