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Air Asia to launch Indian no-frills airline

Air Asia is planning to set up a new India-based airline with one of the country’s biggest companies.

Malaysia-based Air Asia, which is run by chief executive Tony Fernandes, will take a 49 per cent stake in the new Indian carrier with the rest of the company being owned by Tata Group. Indian businessman Arun Bhatia of Telestra Tradeplace will also be a partner in the new joint venture.

Fernandes said in a statement: “We have carefully evaluated developments in India over the last few years and strongly believe that the current environment is perfect to introduce Air Asia's low fares which stimulate travel and grow the market.

“Air Asia believes Indian aviation has enormous long-term growth potential and is expected to produce tremendous upside for first movers.”

The new joint venture will be based in Chennai and will operate domestic flights around India. Details of a starting date for the airline have yet to be revealed.

Air Asia already operates in Thailand, Indonesia, the Philippines and Japan. But the company ended Air Asia X flights from the UK to Malaysia last year after a move from Stansted to Gatwick failed to pay off.

Tata said it would be a “financial investor” in the joint venture and Air Asia would be running the airline.

Fernandes and Bhatia are also co-owners of English Premier League football club Queens Park Rangers.

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