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KUALA LUMPUR (Reuters): Malaysia’s flagship low-cost carrier AirAsia Group Bhd has given its strongest indication to date that it could exit India, saying on Tuesday (November 17) that it was reviewing its investment in a joint airline there.
The group said in a statement that its operations in India, like those of its now-closed business in Japan, have depleted cash and added to the group’s financial stress.
“Cost containment and reducing cash burning remain key priorities evident from the recent closure of AirAsia Japan and an ongoing review of our investment in AirAsia India,” he said.
AirAsia closed its operations in Japan, the smallest of its foreign subsidiaries, last month.
The airline owns 49 percent of AirAsia India, a joint venture with Tata Sons. The Times of India reported last month, citing sources, that Tata Sons parent is in talks to buy AirAsia Group’s stake.
The group’s chief executive, Tony Fernandes, told Reuters in September that the group intends to consolidate and strengthen its presence in Asean, which could one day mean exiting Japan and India.
AirAsia Group said it remains confident of returning stronger, more robust and faster than many competitors, given strong signs of recovery in its key domestic markets due to pent-up demand and numerous Covid-19 vaccines in near-final stages of testing.
“The general outlook is that air travel will pick up very soon; we expect to return to pre-pandemic levels on many Group routes by mid-2021, if not sooner, ”said Group Airlines Chairman Bo Lingam.
AirAsia Group’s stock price hit its highest level since June 29 on Tuesday on a second straight day of strong gains, likely fueled by news that American vaccine maker Moderna Inc’s experimental vaccine is 94.5 percent. effective in preventing Covid-19 based on provisional data from a late-stage trial.
Shares in its long-range division AirAsia X Bhd rose as much as 14%.
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