One of the worst-hit industries due to the pandemic COVID-19is passenger airlines. The entire industry is based on moving individuals fromone place to another and this is the thing that had to be forbidden in dueprevent the pandemic from spreading.
All airlines are facing financial problems because the costsof keeping idle are extremely high for this industry. And business has beenalmost nil from last six months. AirAsia, a global airlines company, hasstopped inflow of cash to its Indian operations.
AirAsia began its operations in India in 2014 with a plan tobreakeven in the first four months of flying. Almost six years later, thecompany has yet show green in its accounting books. Still, the company enjoys a6.8% market share and is providing livelihood to about 3,000 people.
Tata Group holds a majority stake in the airline at 51%.Tata Group has provided emergency funding of $41 million to tide over the liquiditycrunch brought on by the lockdown, but there has been no commitment for a fullrescue, as informed by people who wish to remain anonymous.
Even though suggestions were made by the Indian governmentthat the Indian arm of AirAsia was closing business in the Indian arm, thecomment seems to have been taken out of context. Also, the Japanese arm of thecompany has also immediately ceased operations.
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Tata itself is weighing the options before it. Tata may lookto buy out AirAsia and save the carrier. The Tata Group also has a controllingstake of 51% in another airline company Vistara full-service airline venturewith Singapore Airlines Ltd.