Tata Sons Likely To Write Off AirAsia India's Rs 2600 Crore Loss To Move Towards Air India Acquisition

Tata group owner Tata Sons will likely have to make a provision of Rs 2,600 crore as accumulated losses for low-cost carrier AirAsia India. The company is seeking to absorb AirAsia India into Air India and merge with Air India Express, as per ET report.

Earlier this year in April 2022, Tata Group-owned Air India had proposed to buy the entire equity share capital of AirAsia India, in which Tata Sons already has a majority stake of 83.67%. It planned to merge into a single airline. AirAsia India's remaining 16.33% stake is currently owned by AirAsia Investment Ltd, part of Malaysia's AirAsia Group.

airasia/twitter

In June 2022, Air India finally got the approval to acquire AirAsia India. The Competition Commission of India (CCI) approved Air India’s acquisition of the entire shareholding in Air Asia India.

As per various media reports, Tata group reportedly plans to have Air India as its flagship carrier and merge the low-cost airlines AirAsia India and AI Express. On the other hand, Vistara, which is Tata’s joint venture with Singapore Airlines, is expected to continue as a separate carrier for now along with Air India. For the uninitiated, Tata’s AI Express is primarily an international budget carrier connecting south India to the Gulf and southeast Asia.?

Coming back to the loss write off, ET report mentioned that no decision has been taken on whether the write-off will be included in the balance sheet of Tata Sons or Air India, citing officials close to the development.

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Earlier this year, Tata Sons had bought state-run carrier Air India in a $2.4 billion equity and debt deal, regaining ownership of what used to be India's flagship carrier.

The deal included three entities: full-service carrier Air India, its low-cost arm Air India Express, and AI SATS, which provides ground-handling and cargo services, Reuters report mentioned.

Also Read:?List?Of All Companies Owned By The?Tata?Group

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