Tata Sons to gain full control over AirAsia India operations

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As per some report published in Business Standard, Tata Sons is all set to gain full control over Low-Cost Airline AirAsia India. The Malaysian parent of the airline has agreed to amend a controversial brand licensing agreement that gave it control of crucial functions.

The development comes after Tata Sons and AirAsia Berhad decided to amend a controversial brand licensing agreement that gave the Malaysian firm control over crucial functions of the carrier.

The draft agreement submitted to the aviation ministry by the two groups, the report said, makes it clear that various departments such as sales and distribution, revenue management, network planning, catering, and engineering, among others, will now be under the control of AirAsia India thus nullifying the need of prior approval from the Malaysian parent firm.

Further, the report said, Tata has already appointed key members of its group into the key posts of the carrier. This includes the appointment of Sunil Bhaskaran as chief executive of AirAsia India and the upcoming appointment of Tata Sons president Banmali Agrawala as its chairman.

The 2013 agreement, the report said, gave the Malayasian group strategic power over the carrier as all key decisions were to be approved by it. This, in turn, had led to controversy in India. The civil aviation regulations in the country make it very clear that the effective control of all jointly held Indian carriers should be in the hands of the Indian firm.

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Tata Sons owns a 51 percent stake in AirAsia India while AirAsia controls the remaining 49 percent.

Source: Business Standard

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