Abstract

After a long hiatus, the Tata Group (Tata) entered the civil aviation industry in India through a joint venture partnership with Malaysia-based Airline Group Air Asia Berhad (AAB) after Foreign Direct Investment (FDI) norms were eased in India in the year 2013. The joint venture partnership was formed under the name Air Asia India (AAI) in the year 2014. Though it was considered to be an ambitious project for both entities, AAI remained unprofitable. In 2020, with the global aviation industry heavily impacted by the Covid-19 pandemic, AAB decided to sell its stake to its partner Tata and exit the joint venture. However, for Tata, the decision to purchase a stake in AAI remained a matter of strategic choice. The present case study can be used to discuss the concepts of joint ventures, their benefits and limitations, and the reasons for the failure of joint ventures.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Joint ventures and features of joint ventures
• Advantages and disadvantages of joint ventures
• Reasons for the failure of joint ventures

Keywords

AirAsia India; TATA Group; AirAsia Behad; Civil Aviation Industry; Low-cost no-frills airliner; AirAsia Japan; Tony Fernandes; cost available per seat kilometer (CASK); low-cost terminals; fuel efficient aircraft; AirAsia Red Carpet; Vistara Airlines; Aviation Industry; Joint Venture