The board of AirAsia India (Bengaluru International) last month approved the issuance of INR2.34 billion (USD34.88 million) worth of new shares to its two key shareholders, Tata Group and Malaysia's AirAsia Group, a filing with the Indian Ministry of Corporate Affairs has shown.

The rights issue has yet to take place and will only do so once the LCC's board has increased its authorized share capital to INR5.5 billion (USD81.98 million).

Both entities currently hold a 49% stake in the airline with the remaining 2% held by Tata Group executives (and AirAsia India board members) Subramaniam Ramadorai and R. Venkataramanan.

The share increase comes on the back of New Delhi's decision to revise its 5/20 rule which governs an airline's eligibility to undertake international flights.

Whereas under previous conditions, an airline was required to have been in service for at least five years and operate at least twenty aircraft before applying for international traffic rights, the revised rule now states that any airline can commence international operations provided they allocate twenty aircraft or 20% of their total capacity (in terms of the average number of seats on all combined departures), whichever is higher, for domestic operations.

As such, AirAsia India is accelerating its fleet expansion plans aiming to operates ten A320-200s by the end of this year and twenty by the end of next year.

Rival carrier GoAir (Mumbai International) has also announced its own plans to increase its funding reserves ahead of the launch of international flights next year. According to the Business Standard newspaper, the LCC is planning to hold an IPO during the last quarter of the current calendar year with the aim of raising around INR10 billion (USD149 million).

With an incoming fleet of 144 A320neo now inbound thanks to a fresh order placed at last week's 2016 Farnborough International Airshow, the LCC has set its sights on serving Phuket, Bangkok Don Mueang, Sharjah, Kuwait, Kunming Changshui and Guangzhou from its Delhi International and Mumbai International hubs next summer. Then, next winter, it plans to connect Kochi International, Chennai and Hyderabad International with Dammam, Kuwait City, Muscat, and Sharjah.

Its fleet currently stands at twenty-one A320 Family jets of which two are A320neo.

At present, both AirAsia India and Go Air operate domestic Indian flights exclusively.