Kuala Lumpur/New Delhi: Malaysian carrier AirAsia, Asia’s biggest budget airline, Thursday said that it will invest USD 50 million to start a joint venture in India with the Tata Group, as per media reports.

The new airline is likely to start operations in the fourth quarter of this year CEO Tony Fernandes said.

AirAsia, Tatas and Hindustan Aviation of Bhatias have signed a partnership agreement for the venture.

AirAsia has applied to Foreign Investment Promotion Board (FIPB) to take 49 percent in a venture with Tata Sons Ltd and Arun Bhatia’s Telestra Tradeplace Pvt Ltd, the low-fare carrier said in a statement.

Once approved, they will seek an air operators permit.

The move follows government’s recent decision to allow foreign carriers to invest in Indian airlines.

Tata Sons, the holding company of the USD 100 billion salt-to-software conglomerate, will hold 30 percent in the joint venture but will not have any operating role in the airline.

This will mark the return of Tata to aviation. State- owned Air India had grown out of Tata Airlines, which began flights in 1932.

The proposed joint venture will operate from Chennai and will focus on providing domestic connectivity to Tier-II and Tier-III cities, statement by the Malaysian carrier from its headquarters in Sepang said.

As per current rules, a carrier must complete five years of domestic operations before becoming eligible for starting overseas flights.

AirAsia, through its operations based in Thailand and Malaysia, flies to Chennai, Bangalore, Kochi, Tiruchirappalli and Kolkata in addition to 20 countries across Asia.