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AirAsia denies India plans

AirAsia was reported to be taking a stake in SpiceJet (photo by Jordan Tan)
AirAsia was reported to be taking a stake in SpiceJet (photo by Jordan Tan)

AirAsia has denied reports that it is planning to invest in Indian low-cost carrier, SpiceJet.

Citing unnamed Indian government officials, Reuters yesterday reported that Malaysian budget airlines group was planning to purchase Delhi-based SpiceJet. But AirAsia’s Group CEO, Tony Fernandes later issued a statement flatly denying the report.

“AirAsia rejects the speculation surrounding our possible expansion in India. These reports are completely incorrect. AirAsia has not submitted a bid for the Indian budget carrier, and has no intention of doing so,” Fernandes stated.

SpiceJet’s shares soared almost 20% yesterday after Reuters broke the story, claiming that AirAsia and Etihad Airways were in talks to buy stakes in SpiceJet and fellow Indian carrier, Jet Airways.

Earlier this year, Abu Dhabi-based Etihad had been rumoured to be interested in taking a stake in SpiceJet, and the airline has declined to comment on the latest speculation. Rumours of international airlines investing in Indian airlines are likely to intensify, following a recent government ruling allowing non-Indian carriers to take up to 49% stakes in domestic airlines.

Etihad, which owns stakes in Virgin Australia, Aer Lingus, airberlin and Air Seychelles, has already claimed its support for the Indian investment ruling, saying the Indian aviation market offers “tremendous potential”.

AirAsia meanwhile, recently aborted its attempt to take over Indonesia-based Batavia Air. Like Etihad it is also on a major overseas expansion, having launched subsidiaries in Japan and the Philippines earlier this year.