AirAsia plans Indian airline venture with Mumbai conglomerate Tata

AirAsia, South East Asia's biggest budget airline, said it plans to start an airline in India with the Tata Group after the country eased rules last year to permit overseas carriers to invest.

AirAsia made an application to India's Foreign Investment Promotion Board to invest 49 per cent in a joint venture with Tata Sons and Arun Bhatia of Telestra Tradeplace, the budget airline said in a statement to the stock exchange in Kuala Lumpur.

Prime minister Manmohan Singh's government in September eased foreign investment rules to allow overseas airlines to directly invest in local carriers. After the move, Jet Airway began discussions with Middle East carrier Etihad Airways for an investment.

"Subject to FIPB approval, the proposed joint venture company will make an application to Indian aviation regulators for the air operators permit," AirAsia said in the statement.

* Bloomberg News