Tata Sons is reportedly looking to end its partnership with AirAsia Berhad as the company only wants to be engaged in one airline business -- Vistara, the joint venture with Singapore Airlines (SIA), the Economic Times reported.

The Tata Group holding company is proposing to "exit AirAsia India and run the only full-service private airline in India, which is Vistara-plus-Jet," a person aware of the development told the paper.

Currently, Tata Sons owns 49 percent of AirAsia India with the rest held by Malaysia-based AirAsia Berhad. The airline has a fleet of 19 aircraft.

The initial discussions in this respect have begun even as the Tatas are in talks to acquire Naresh Goyal-controlled Jet Airways.

According to the report, Tata may find it difficult to find a suitable buyer because of AirAsia India’s small size, slow expansion, losses and, an ongoing Central Bureau of Investigation (CBI) investigation into alleged lobbying and irregular transactions by AirAsia Group CEO Tony Fernandes and other AirAsia executives.

Alternatively, Fernandes may look to sell his stakes in the airline, another person told the paper.

"With the cases against him, it is getting increasingly difficult for Tony to do business in India," another person said, adding that he won’t leave without getting a good value for his airline’s stake.

While a potential structure for the deal has not been finalised as yet, media reports suggest the first leg of Tata Group's plan to acquire a controlling stake in Jet Airways may involve a merger of the beleaguered airline with Tata SIA Airlines, a joint venture between the Tatas and Singapore Airlines that operates Vistara.

In the second leg, Singapore Airlines may purchase the entire stake of Jet Airways promoter Naresh Goyal's family in the combined entity, sources told the paper.

Naresh Goyal and wife Anita Goyal own 51 percent in Jet Airways, while UAE-based Etihad Airways owns 24 percent.

Completely acquiring AirAsia India may not make too much sense for the Tatas, another person close to the development told the paper.

"It would get very little in the airline except for the licence and slots as the reservation systems, infrastructure, accounting etc are all owned and managed from Malaysia by AirAsia Berhad or its companies," the person said.

Earlier this year, Malaysia's flagship budget airline agreed to sell AirAsia's leasing operations for $1.2 billion to firms managed by BBAM Limited Partnership. The sale was a part of AirAsia's efforts to sell non-core assets and allow it to cut debt.

https://www.moneycontrol.com/news/business/tata-sons-may-end-joint-venture-with-airasia-3186501.html