Will Air Asia’s dreams Be Grounded Before They Take Off In India?

With the sudden news of a tie-up between Tata and Singapore Airlines, Air Asia’s deal with the Tata’s seem to be in jeopardy. Tata have been in a strong coalition with the low fare air carrier owned by Tony Fernandes, and looked like the perfect partners to bring the air travel costs down in India (at least in the not-so-frequent sectors).

However, the move between Tata and SIA has sent jitters to Air Asia partners in India. Arun Bhatia who is the third partner in the venture wants to bring the issue up in the next board meeting and sort things out. We might even see him asking to take over Tata’s share all together.

Tata had plans to enter the aviation industry since more than a decade now. Alliance with SIA would be the perfect way to enter the full fare segment and become a well known name in Indian and international air circuit. SIA is part of the star alliance group. It is one of the best and most preferred airlines to travel world over. SIA and Tata have pledged to combine 100 million USD for the new endeavour.

However there are few challenges in this tie-up that require SIA to go through some Indian regulatory approvals. But whatever the case be, no body likes a partner making an alliance in a competing business. All eyes are now on the next Air Asia Board meeting, which should clear the air of any speculation.