New Delhi: AirAsia India had to pay an annual fee of Rs 10 crore to AirAsia Global Services (AGSS) - a subsidiary of its Malaysian partner AirAsia Bhd - for services it should have ideally handled on its own.
The "services", according to informed sources, included finance support, human resources, revenue management, cancellation and refunds.
According to filings with the Malaysian stock exchange, AGSS was set up in 2013 to provide shared business, support and outsourcing services. According to the agreement signed on June 24, 2015, AirAsia India would pay AGSS staff cost, benefits, other on-going operating expenses and overheads in proportion to the number of personnel assigned to the airline to deliver the services.
Notably, a clause was added in the agreement to ensure that AGSS will not be answerable to the management of AirAsia India in case of any disputes. "No visibility and accountability will be provided by the body to the local management," said the clause. AGSS provides a similar service to AirAsia Bhd's other two other affiliates - Indonesian AirAsia and Thai AirAsia. When asked, an AirAsia spokesperson refused to comment.
13/04/16 Arindam Majumdar/Business Standard
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The "services", according to informed sources, included finance support, human resources, revenue management, cancellation and refunds.
According to filings with the Malaysian stock exchange, AGSS was set up in 2013 to provide shared business, support and outsourcing services. According to the agreement signed on June 24, 2015, AirAsia India would pay AGSS staff cost, benefits, other on-going operating expenses and overheads in proportion to the number of personnel assigned to the airline to deliver the services.
Notably, a clause was added in the agreement to ensure that AGSS will not be answerable to the management of AirAsia India in case of any disputes. "No visibility and accountability will be provided by the body to the local management," said the clause. AGSS provides a similar service to AirAsia Bhd's other two other affiliates - Indonesian AirAsia and Thai AirAsia. When asked, an AirAsia spokesperson refused to comment.
13/04/16 Arindam Majumdar/Business Standard
