FIPB to consider AirAsia's entry proposal tomorrow

The Finance Ministry is likely to consider tomorrow the investment proposal of Malaysian budget carrier AirAsia which seeks to enter India through a joint venture with Tata Group and another company.

The investment proposal of AirAsia Investment, Malaysia, has been listed on the agenda of the Foreign Investment Promotion Board (FIPB) meeting, an official said.

AirAsia has applied to FIPB to take 49 per cent in a venture with Tata Sons Ltd and Arun Bhatia's Telestra Tradeplace Pvt Ltd.

If cleared by FIPB, this would be the first entry of a foreign carrier in the domestic aviation sector after the liberalisation of FDI policy in September last year.  The new policy allows foreign carriers to invest in Indian airlines.

The new airline is looking to start flying from this year-end with 3-4 planes and an initial investment of about $50 million by the Malaysian budget carrier.

The proposed joint venture will operate from Chennai and will focus on providing domestic connectivity to Tier-II and Tier-III cities, a statement by the Malaysian carrier from its headquarters in Sepang had said earlier this week.