AirAsia eyes India, Zest Airways

Petaling Jaya (The Star/ANN) - AirAsia may be expanding its wings to India through a new start-up with an Indian partner and also strengthening its presence in the Philippines by acquiring a stake in Zest Airways, newspapers reported in the two countries.

The Times of India reported on Wednesday that AirAsia might be the first carrier to invest in the aviation industry there after India's cabinet decided to allow foreign investors to own up to a 49 per cent stake in its airlines.

The newspaper also reported that Asia's largest low-cost carrier was looking at the possibility of a start-up with a strong Indian partner instead of investing in an existing airline.

Replying to the Indian daily through e-mail, AirAsia Group chief Tony Fernandes said: "We will make statements in due course."

Prior to the news, Fernandes tweeted: "Fantastic news that India has opened up investment to foreign airlines great that Indian government has put people first. Will we be in India. Well, let's see."

The homegrown carrier has been keen to tap into the second-most populous country in Asia with over 1.2 billion people even before the policy was amended.

Besides India, Fernandes had also identified South Korea, Vietnam, Cambodia and China as potential markets.

It is currently flying to five cities in India, namely Kochi, Trichy, Chennai, Kolkata and Bangalore from Kuala Lumpur.

Also brewing was AirAsia's move to acquire Philippines-based low cost carrier Zest Airways. In an article yesterday, Business Inquirer said: "Highly placed Inquirer sources said that while nothing has been signed as of yet, negotiations were ongoing between AirAsia and the group of former ambassador and juice-drink magnate Alfred Yao." According to the daily, Yao declined to confirm negotiations with AirAsia but admitted that Zest Airways had been approached by several parties on the possibility of joining hands with new investors to compete in the Philippines' crowded skies.

Business Inquirer quoted Yao as saying Zest Airways would make an appropriate announcement once a deal had been signed.

Unlike India, AirAsia already has a foothold in the Philippines via AirAsia Philippines which commenced its operations in March this year.

The unit was 40 per cent owned by Fernandes while the other 60 per cent shared by Antonio "Tonyboy" Cojuangco Jr., Michael Romero and Marianne Hontiveros equally.

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