Indian industrial conglomerate Tata Sons remains committed to the aviation sector and will inject emergency funding into both its airlines, low-cost carrier AirAsia India (Bengaluru International) and full-service carrier Vistara (UK, Delhi International), Indian media have reported.
According to Live Mint, Tata Sons is preparing to inject USD50 million into AirAsia India. The investment, which will be executed through a mix of equity and debt, will likely increase the group's stake beyond the current level of 51%. Tata Sons' JV partner in AirAsia India, AirAsia Group, will not participate in the increase as it is currently reviewing its role in the carrier's future.
"Cost containment and reducing cash burns remain key priorities evident by the recent closure of AirAsia Japan (Nagoya Chubu) and an ongoing review of our investment in AirAsia India," the Malaysian holding said.
AirAsia currently holds a 49% stake in AirAsia India and has yet to announce any decisions regarding any potential divestment or continued involvement. According to sources, Tata Sons could look for another partner to replace the Malaysian group.
Contrary to AirAsia Japan, which was by far the smallest unit in the group, the Indian airline is a sizeable division of the group. Its fleet of thirty A320-200s and one A320-200Ns places it above Philippines AirAsia and Indonesia AirAsia in terms of the number of operated aircraft, the ch-aviation fleets module shows.
Meanwhile, the Economic Times has reported that Tata Sons and JV partner Singapore Airlines Group injected a further INR5.85 billion rupees (USD79.2 million) into Vistara. In this case, the two partners both participated in proportion to their respective shareholdings - 51% and 49%. Tata Sons and Singapore Airlines Group already poured INR12.5 billion (USD169.3 million) into Vistara during two previous rounds of funding in 2020.
