AirAsia India is adequately funded and on track to expand its operations, the airline's chief commercial officer Ankur Garg wrote to travel agents today.
The communication comes in the backdrop of its Malaysian promoter's decision to review its investment in India. The announcement sparked concerns about the airline's exit from India and Garg's email sought to assuage those concerns.
"AirAsia India remains on the path of serving the Indian market by growing its network and scale of operations. While the current pandemic has severely impacted the aviation sector and AirAsiaIndia is no exception, we have remained adequately capitalised throughout these months by securing the funding from our majority shareholder as and when required," Garg wrote to Travel Agents Association of India today.
He said the airline's fleet induction plan remains on track and will be adding five planes over next few months. "Another evidence of the financial stability of AirAsia India is that we have been smoothly processing all refunds in the last few months and never forced a conversion of bookings during lockdown to "credit shell," Garg said in his letter.
AirAsia India is co-owned by Tata Sons and AirAsia Berhad Malaysia. Given Covid-19 challenges the Malaysian shareholder has stopped funding the airline in India. The AirAsia group exited from Japan market recently and announced it would review its investment in India. This was its first direct hint that Malaysian group was looking to sell its stake in the Indian airline.
Earlier this week, a media report said that Tata Sons which owns majority stake in the venture will provide $50 million in emergency funding to keep the airline afloat.