AirAsia India ‘draining cash’; reviewing investment in joint venture: Malaysia’s AirAsia Group

By: |
Updated: Nov 17, 2020 11:16 PM

According to the AirAsia Group, its third quarter operating statistics highlight the clear, quick path to recovery is well underway.

According to the AirAsia Group, its third quarter operating statistics highlight the clear, quick path to recovery is well underway.AirAsia India -- a joint venture between AirAsia Investment Ltd and Tata Sons that started operations more than six years ago -- has been facing headwinds for quite sometime.

Indicating possible exit, Malaysia’s AirAsia Group Berhad on Tuesday said it is reviewing its investment in low-cost carrier AirAsia India, which has been “draining cash” and causing much financial stress.

AirAsia India — a joint venture between AirAsia Investment Ltd and Tata Sons that started operations more than six years ago — has been facing headwinds for quite sometime.

In a statement, AirAsia Group expressed confidence of returning stronger, more robust and faster than many competitors in this new world of travel.

However, it also flagged concerns about its businesses in Japan and India.

“Our businesses in Japan and India have been draining cash, causing the Group much financial stress. 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,” President (Airlines) of AirAsia Group, Bo Lingam said in the statement.

The aviation sector has been severely hit by the outbreak of the coronavirus pandemic that has resulted in lockdowns and suspension of commercial air services in various countries, including India.

According to the AirAsia Group, its third quarter operating statistics highlight the clear, quick path to recovery is well underway.

“There were strong improvements from every major domestic airline in the Group across many key metrics in comparison to the preceding quarter. These include a 36 per cent increase in passengers carried by AirAsia Malaysia, 79 per cent increase in passengers carried by AirAsia India and an increase of 65 per cent of passengers carried by AirAsia Thailand,” it noted.

When contacted, an AirAsia India spokesperson said, “We decline to comment.”

A Tata Sons spokesperson also did not offer any comments.

Headquartered in Bengaluru, AirAsia India flies to 19 destinations across India with 31 Airbus A320 aircraft. It commenced operations on June 12, 2014.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Morbi clock makers want Gujarat govt to set up toy park in town
2Let us declare NPAs, banks to Supreme Court; govt pleads against sector-specific relief
3Bengaluru key growth driver, share from other markets to rise in 2-3 years: JC Sharma, vice-chairman and MD, Sobha