video transcript

He launched Asia's largest budget airline. Now AirAsia's Tony Fernandes wants to spread his wings to India. He's joining forces with India's most powerful business man Ratan Tata, the head of Tata Group, and a third investor to launch a regional airline in India. SOUNDBITE: Tony Fernandes, CEO AirAsia, saying (English): 'He's one of India's most respected people and most respected corporate citizens and obviously having his endorsement to a Tata board and the new CEO I think was very important and I think from the reaction I've had in India it seems like a marriage made in heaven having someone like him partnering us." India's airline industry has been battling heavy losses from rising fuel costs and fierce competition. Last year the government eased its foreign investment rules to allow overseas investors to own up to 49% of local airlines. But AirAsia is the first to take advantage. The new airline would see AirAsia own 49 percent, Tata Sons would have 30 percent and Arun Bhatia of investment firm Telestra Tradeplace the rest. SOUNDBITE: Tony Fernandes, CEO AirAsia, saying (English): "We have the expertise in running an airline and getting the cost structure right and the brand, but we don't know India. We know India from flying into it but that's just scraping the surface and that's what the beauty of the relationship with Tata is. They are in many businesses, many industries. They touch consumers in many ways, they know the Indian regulatory scheme. They know the people that matter." But Fernandes knows it won't be an easy ride. SOUNDBITE: Tony Fernandes, CEO AirAsia, saying (English): "We believe we can make it a success, we believe that there isn't a true low-cost airline that has been disciplined in the processed of making it true. If you look at every Indian low cost airline, some of them have business class, some of them start at low cost, some of them are full service. Most of them have two types of aircraft, some of them operate in big expensive airports. So we think that there is a niche for us. We're not there to cannibalise the market, this isn't political, we're here to grow the market, which is what we've always done." AirAsia currently flies to four south Indian cities and Kolkata as well as 20 other countries across Asia. The new carrier would operate from Chennai in southern India, and serve smaller cities. They're now awaiting Indian government approval to get their latest venture off the ground.