In AirAsia India’s latest board meeting, joint venture partners Tata Sons and Malaysian low fare carrier AirAsia Berhad decided to raise ₹300 crore by issuing optionally convertible redeemable debentures. Prior to that, in a Vistara board meeting, promoters Tata Sons and Singapore Airlines were together allotted fresh equity shares worth ₹75 crore. The business decisions were sourced from RoC by business intelligence company Veratech for ET.
Tata Sons owns 51% in both airlines. The moves come even as AirAsia Berhad is understood to be in discussions with Tata Sons to exit AirAsia India. The two are yet to arrive at a decision.
Airlines in India and the world are grappling with drastic cuts in revenue as the pandemic has all but sapped demand for travel. The situation is likely to continue and airlines across the world have turned to received support from respective governments.
In India, with no bailout expected from the government, it’s up to airline owners to see companies through the crisis.
AirAsia India’s net loss for the quarter ended March more than doubled year on year to ₹334 crore from ₹147 crore in the previous year, due to higher operating expenses. The airline also plunged to an operating loss from a profit last year, according to figures filed last month by Malaysian parent on Kuala Lumpur stock exchange Bursa Malaysia.
AirAsia Berhad’s auditor EY raised significant doubt on its ability to continue as a going concern.
Vistara is known to have been well supported by its parent companies, even though its losses are higher than AirAsia India.