AirAsia held discussions with Indian carriers, but decided not to go with them and launched a new joint venture carrier with two non-aviation related partners from the country.
The Malaysian airline group's chief executive Tony Fernandes says that the low-cost carrier "looked at many airlines, we looked at their business models and we looked at their cost structures".
"We decided to go for an organic solution, which is what we have principally done," he says. This, he adds, was what AirAsia had done with its other non-Malaysian joint ventures throughout the region.
AirAsia will invest $30-60 million for a 49% stake in the proposed joint venture, with Indian conglomerate Tata Sons and entrepreneur Arun Bhatia holding the remainder. Fernandes says that the board will have a majority of Indian members.
"We have formidable partners who know India well," says Fernandes.
These partners are also likely to play a key role in gaining approvals for the airline, which AirAsia is hoping to launch in the fourth quarter of this year.
Fernandes adds that Tata Sons has a "fantastic consumer face" which AirAsia hoped to leverage, but he confirmed that the carrier will continue with the strategy of using the homogenous AirAsia branding in India.
The Tata group originally founded Air India and Fernandes adds that he would "welcome very much" their involvement in moulding the airline's operations.
The Indian airline follows joint ventures in Indonesia, the Philippines, Thailand and Japan. AirAsia and Fernandes also have a stake in AirAsia X, the Malaysia-based long-haul, low-cost airline.
Fernandes says that AirAsia is, for now, done with forming joint ventures after this Indian airline. It plans to focus on building up its existing operations and ensuring that they become profitable, he adds.