According to India’s Business Standard, Air India has proposed to fully acquire AirAsia India to merge it with its own low-cost carrier Air India Express.

However the news, citing The Economic Times (ET), said no decision has been made yet on whether the write-off will be included in the balance sheet of Tata Sons or Air India.

The remaining 16.33% interest in AirAsia India is owned by AirAsia Investment Ltd, which is a part of the AirAsia Group.

The ET report said that auditors had cast doubts on AirAsia India as a “going concern”, pointing out that the low-cost carrier’s net worth has already been fully eroded and its liabilities had exceeded its current assets.

Like many other airlines, AirAsia India was badly affected by the Covid-19 pandemic.

Earlier this year, Air India offered to buy the entire equity share capital of AirAsia India and had sought the approval of the Competition Commission of India for the takeover.

Tata, which has interests in steel and auto, bought state-run Air India in a US$2.4 billion (RM10.8 billion) equity and debt deal earlier this year to regain ownership of what used to be India’s flagship carrier after nearly 70 years.

The Business Standard also said that the deal included the full service carrier Air India, its low-cost arm Air India Express and AI SATS, which provides ground-handling and cargo services.