AirAsia Group said to stop funding Indian venture

AirAsia Group Bhd has stopped funding its Indian affiliate as the global travel slump leaves the Malaysian group struggling to support a sprawling empire of no-frills airlines, people familiar with the matter said.

AirAsia India Ltd’s future may now depend on Indian conglomerate Tata Group, its majority shareholder, which has provided emergency funding, but has yet to commit to a full rescue, said the people, who asked not to be named discussing a confidential matter.

The airline is not at any immediate risk of folding, the people said.

Indian Minister of Civil Aviation Shri Hardeep Puri said over the weekend that AirAsia was shutting up shop in the South Asian nation, though his office later suggested the comment was taken out of context.

AirAsia Group and AirAsia India declined to comment, as did a representative for Tata Group.

AirAsia said earlier on Monday that its Japanese arm will cease flying immediately as the COVID-19 pandemic continues to roil the airline industry.

Once the poster child of the region’s revolution in low-cost travel, the group is seeking as much as 2.5 billion ringgit (US$600 million) to steer its way through the crisis.

Meanwhile, long-haul arm AirAsia X Bhd has said it needs to reach deals with major creditors to restructure debt amid “severe liquidity constraints” that threaten its ability to resume services and continue as a going concern.