AirAsia India to be based in Chennai after government OKs joint venture

The new airline, to be based in Chennai and managed by AirAsia, would involve Tata Sons Ltd. taking a 30-percent stake and Arun Bhatia's investment firm Telestra Tradeplace PVT Ltd. taking the remaining stake. AirAsia would initially invest US$15 million.

Earlier media reports out of India claimed that the deal had hit a snag because the Indian Aviation Ministry was said to have reservations about the deal.

Mumbai-based The Economic Times reported that the ministry was understood to have expressed reservations in a note to the FIPB.

The newspaper reported that the ministry's reservations rested on the issue of whether the revised foreign direct investments in aviation rules were applicable to new joint ventures or only existing companies in the industry.

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