AirAsia has been given the go-ahead for its plans to establish a budget carrier in India.
AirAsia India will be the first airline with foreign investment to operate in the country after winning approval from India’s civil aviation authority.
The carrier is being established with India’s Tata Group but no date has been given for the start of operations.
Mittu Chandilya, chief executive of AirAsia India, said it was working on being “the lowest-cost” airline in the country.
He said he was confident the airline would be able to make money despite lowering the fares, the BBC reported.
India opened up its aviation market to foreign investment in 2012 in an attempt to boost growth in the sector and the overall economy.
Singapore Airlines’ joint venture with the Tata Group to start a full-service airline in India is awaiting an operating permit.
Etihad Airways last year bought 24% of Jet Airways, the second-largest carrier in India by domestic market share.
India has five operational carriers and one regional airline. Competition eased after the grounding of Kingfisher Airlines in October 2012.