AirAsia India appoints Tata Steel's Sunil Bhaskaran as new CEO and MD

“We are delighted to welcome Bhaskaran as the new CEO & MD of AirAsia India. With India’s aviation sector growing at a rapid pace, we are confident his extensive experience, ability to drive performance and work seamlessly with all stakeholders will be a great asset for the company," said S Ramadorai, chairman, AirAsia India.

AirAsia Group CEO Tony Fernandes and Bo Lingam, deputy group CEO, have also stepped down from the AirAsia board, said the source who declined to be named.

Chairman S Ramadorai will be replaced by Tata Sons president Banmali Agrawala, sources familiar with the matter told CNBC-TV18.

Air Asia India is likely to undergo leadership reshuffle under Agrawala, currently the president, infrastructure, defence and aerospace at Tata Sons.

Tata Sons own 49 percent stake in AirAsia India.

The leadership change comes at a time when AirAsia India is facing a turbulent phase in the world's fastest growing aviation market.

In June, the CBI registered a case of criminal conspiracy against Fernandes, Lingam, nominee director R Venkataramanan and AirAsia India "for paying a bribe to unknown public servants of the Government of India and others" while lobbying for an amendment in the aviation policy and trying to secure a licence to start overseas flights.

The board of the low-cost carrier, a joint venture between Malaysia's AirAsia Investment Ltd and Tata Sons, has denied any wrongdoing.

The airline has 19 planes and said it will expand its fleet to 60 over the next five years. Under Indian rules, it can launch international flights once it has 20 planes.