AirAsia to start India ops with 3 aircraft later this year
Chennai: Malaysian low-cost carrier AirAsia on Saturday said its Indian operations should begin later this year with three aircraft for the southern region and it would also look at setting up some ancillary businesses in the country.
"I have always said we will start in the fourth quarter. People said September, October whatever. I hope we start this year. It is not about when we start. It is about we start it right. I mean no rush," AirAsia Group CEO Tony Fernandes told reporters on his maiden visit to Chennai.
AirAsia has formed a joint venture with Tata Sons and Arun Bhatia of Telestra Tradeplace with 49:30:21 holding to start its India operations.
"We haven't got the approvals yet and I still believe we can start this year. May be September is a bit ambitious. I do not want to commit a date. Really, it is on the hands of the regulators to give us all the approvals. We are at the NOC stage. The key one is NOC. No, we have not get the NOC. It is with the Union Home Ministry."
AirAsia is expected to bring in competitive pricing in the Indian aviation market with its "nano" airfares. To a particular query, Fernandes said Air Asia India will be the "Chennai SuperKings of cost" in offering airline services.
"We will start with three planes. We rather not say it now (the destinations). A quick way of looking at is Tiruchirapalli. There was never a flight from Kuala Lumpur to Tiruchirapalli," he said.
"Come next week, there will be three flights a day. We have benefitted tremendous amount of people. So, we will apply tremendous amount of strategy to India and look at new destinations and markets that have been under-served."
To a query on roping in former Tata Group Chairman Ratan Tata, Fernandes said: "He (Tata) is one of the most respected businessmen in the world, not just in India. He is humble, simple guy. He fits our culture very well.
"He is very understated of what he achieved in India. well, our strategy will be sitting down often with the senior management to map out the way we are going to take this airline. I want him involved."
Stating that his dream was to offer flight connectivity to every individual, Fernandes said: "I want to make sure everyone can fly. I want make sure someone who has taken a train for nine hours, can now fly for 45 minutes, for someone who took four days to come to Chennai, to do it in three hours. That’s my dream."
To a query on why he opted for Chennai as base for its airline operations, Fernandes said millions of opportunities are available in Southern region.
"I just loved the South. South is great. There are millions of people, and millions of tourist potential and millions of business opportunities. We are very happy with the south," he said.
When pointed out Mumbai and New Delhi account for almost 50 per cent of airline business, he said, "Yeah, but we will change that. Singapore was the King of air travel. We have rebalanced that. Malaysia is a big hub. So, Chennai will become the new king. We are kings. We will be the Chennai Super Kings of cost (in offering airline services)."
AirAsia has already put in place a strong leadership team for its India operations. Former TCS chief S Ramadorai has been appointed Chairman, while top industry leader Ratan Tata has been named as chief adviser to the board of AirAsia India.
Besides, R Venkataraman (former executive assistant to Ratan Tata) and Bharat Vasani (chief legal counsel of the Tata Group), are among the directors on the board.
AirAsia will be represented by Tony Fernandes and Kamarudin Bin Meranu. Last month, Fernandes had named Mittu Chandilya as the CEO of AirAsia India.
Fernandes said the company would also look at generating revenues by offering ancillary services.
"Ancillary income is adding value services that you may or may not want. Ancillary income is selling you stuff that you may buy at the airport, or you may need like a travel insurance. Very few people who used to fly with us have travel insurance.
"And now they find it very useful. We started an insurance company based on that. Selling duty free when we have international, selling merchandise..Those kinds of ancillary services," Fernandes said.
On his foray into Japan where the airline finally opted to pull out from the joint venture, he said it was a bad marriage and that’s why they decided to pull out from the joint venture partner.
"That’s nothing to do with Japan. That's to do with our partner. We are the lowest cost airline in the world; they are the highest cost airline in the world. Opposites do not attract. Yes, it is a very bad marriage and hence we went for a very quick divorce," he said, adding the airline has not fixed any time frame to recommence its operations once again in Japan.
"It's very important to get the right partner..", he said.