A media report on Tuesday said AirAsia India is controlled by its Malaysian share holder (AirAsia Malaysia), in alleged contravention of foreign direct investment norms.
While the civil aviation ministry has not responded, Tata Sons (which, along with its executives, owns 51 per cent in the airline) denied any violation of norms. However, the revelations have come as ammunition for Bharatiya Janata Party leader Subramanian Swamy, who has been fighting a legal battle against the airline since 2013.
“I will write to the ministry and the Prime Minister’s Office, demanding scrapping of the permit granted to AirAsia India,” Swamy stated.
On Tuesday, Mint pointed out that a brand licensing agreement allows AirAsia Malaysia to exercise control on virtually all aspects of operations of AirAsia India. The agreement, the report said, was signed between the two entities in 2013 and gives the Malaysian partner the influence and control over key functions such as ancillary revenue, branding, revenue management engineering, finance, among others.
At the heart of the controversy is a government rule which states “substantial ownership and effective control” of an airline should vest with Indian nationals.