AirAsia India has been a jointly owned entity between Tata Sons of India, and the Malaysian carrier AirAsia Berhad. However, now it seems, given the new developments, Tata Sons might control all the core operations of the airline including commercial, finance, training and operations. It is worth noting that Tata Sons holds 51% stake in the carrier, whereas, the AirAsia Berhad entity holds the rest of the 49% of the stake in the airline. The controversial brand licensing agreement was signed between Tata Sons and AirAsia Berhad back in 2013 which gave the airline the rights to use the brand in India. However, now this agreement has been amended.
Changes in Agreement for AirAsia India
This agreement meant that key decisions had to be run through the parent company, and the Directorate General of Civil Aviation (DGCA) has rules which govern that the key operations of the airline jointly owned by a foreign firm and an Indian firm should lie in the Indian entity. As per the people aware of the matter, both the parties have signed the agreement to cede control of core activities to AirAsia India. A draft agreement submitted to the Ministry of Civil Aviation and reviewed by Business Standard says that sales and distribution, revenue management, network planning, catering and in-flight services, finance and corporate finance, customer experience, engineering, and leasing contracts will now be under the sole discretion of AirAsia India.
AirAsia India Gains Control of Major Decisions
It is worth noting that AirAsia has got similar agreements with other three airlines as well and these include Thai AirAsia, Philippines AirAsia, and Indonesia AirAsia. These airlines, along with AirAsia India pay annual fees so that they can use the AirAsia brand. The commercial unit of the AirAsia India entity has a full-fledged office in Gurugram and a cabin crew training unit in Bengaluru.