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Air Asia
Air Asia
HISTORY: Air Asia is a Malaysian airlines which started in 1996. They have Headquarters in
Kuala Lumpur. Initially it was started as a government venture later in 2001 it was bought by
Tony Fernandes with the aim that everyone can travel by aircraft. It is a low cost budget
airlines. It was ranked as the best low cost flying airlines by New York times in 2007.In 2012 the
Indian government relaxed its norm and allowed 49% investment in airline industry; after that a
joint venture between TATA sons and Air Asia started with the TATA’s owning 30% of share. Air
Asia also promised a investment of $50 million dollars in the Indian market.
5/20 Rule
According to the Indian Aviation Ministry any commercial airline that wants to fly international
should have a five years of domestic experience and should have at least 20 aircrafts. Air Asia
India entered India in 2012 with partnership with Arun Bhatia and TATA sons had only four
years of experience and eighteen aircrafts.
Shareholder Value
The shareholders and the board was not aware of this transaction. Investigations in the AirAsia
money laundering case were launched on the basis of charges by Tata Group Chairman Cyrus
Mistry ,that fraudulent transactions of rupees twenty two crores, involving non-existent entities
in India and Singapore, were carried out in an airline. The CBI filed case against CEO Tony
Fernandes and R Venkataraman. After the bribery case shares of Air Asia fell by 7%.