THE Indian sky has been “painted red” at last, after over a year of waiting with the official launch of Asia’s largest budget carrier, AirAsia Group’s sixth affiliate AirAsia India Pte Ltd last week.
It is the first foreign airline to be based in India after the country’s government relaxed its rules by allowing foreign carriers to own up to 49 per cent in an Indian airline two years ago, and the journey was not easy.
AirAsia India had to wait patiently for 14 months to receive the approval from India’s Ministry of Civil Aviation as well as the air operator’s permit, besides facing backlash from its competitors in the country.
After all the buzz of its entrance in India’s competitive aviation sector since its announcement on February 19th last year, AirAsia India is here to stay and it will be spreading its wings as far as it can, to reach the mass market in the country for over one billion Indians to fly.
One of the major things that the airline’s chief executive officer Mrithyunjay Chandilya, or better known as Mittu, is to make AirAsia India the biggest airline in the country and the region.
“Revolutionising the aviation sector in India is the goal that we want to achieve,” he told Business Times recently.
The 34-year old Chandilya’s ambition is definitely sky-high, given that India is not new to the concept of budget travel. It already has a few low-cost airlines such as IndiGo Airlines and SpiceJet.
But what he has in mind is to introduce a true low-cost carrier (LCC) concept in India as he opined that the country has not seen a true low-cost airline in the perspective of airfares.
“What India will see with us is truly low fares. We have shown that the fares we offered last month for our maiden trip to Goa were 30 per cent lower (than our competitors) and in certain cases, it was even 60 per cent lower,” he said.
AirAsia India’s maiden flight took off from Bangalore to Goa on June 12 with a 100 per cent load factor. Its flight ticket sales recorded a historic moment when they were sold out within nine minutes of opening sales.
The first task for Chandilya, who has a background in the fashion industry and is a former model is to immediately accelerate AirAsia India’s growth in India by expanding its fleet size to six Airbus A320s by year-end from the current two.
The airline serves two destinations, to Chennai and Goa, from its hub in Bangalore and had introduced a third destination — Kochi — on July 20, while another two new destinations will be announced soon.
Chandilya said AirAsia India aims to carry some 1.2 million passengers in its first year of operations although he admitted that it is an aggressive target. But he is confident that the number would help the carrier break even faster than its other affiliates in Malaysia, Indonesia and Thailand. On an average, AirAsia Group’s affiliates need at least two years to be profitable.
“Within a year I hope we would ultimately have 14 to 16 destinations to offer since we need to expand in India, given its geographic size. Meanwhile, in over a span of three years, I think we will have at least four to five hubs spread across India.”
“The additional planes will enable us to offer new routes and more flight frequencies,” he said, adding that he is bullish on India due to the huge potential that it offers.
Speaking on his plans to expand AirAsia India’s presence to international skies, Chandilya said he wants to introduce routes to destinations such as Southeast Asia and the Middle East.
Also on his to-do list is to connect AirAsia India’s network with its other affiliates using the fly-thru service that the AirAsia Group offers.
“I still want to continue to grow aggressively domestically but should the 5/20 rule be lifted then AirAsia India will definitely fly to other countries,” he added.
The 5/20 regulation states that domestic airlines in India need to complete five years of domestic operations and have a fleet size of 20 aircraft before they are allowed to fly internationally. It is currently being debated in India as the Civil Aviation Ministry suggested a proposal of the abolition of the rule to Prime Minister Narendra Modi.
Meanwhile, AirAsia India plans to bank on ancillary revenues besides carrying as many passengers as it can to deliver profit to the company. As it is, the aviation landscape there is hit by high fuel prices, taxes and fees that have resulted in all airlines posting losses, except IndiGo.
“My principle on ancillary is to offer people what they want to buy on board. A two-hour flight is a long time and people can browse through brochures for something interesting,” Chandilya said, adding that new products, ranging from food to T-shirts, caps and mugs, will be introduced monthly.
Speaking on the competitive landscape of the aviation sector in India, he said that there would be no end in terms of competition between Indian carriers.
“Frankly, I do not want it to end as I think the competition keeps us agile and fighting every day. Every day I and my team have a new purpose of coming to work and we are constantly looking to be better than we were yesterday,” Chandilya said.
He added that in time, the competition between Indian carriers would be a bit more aggressive, but he personally hopes that it would be done in a commercial perspective.
AirAsia India is the result of a triple joint-venture between Malaysian and Indian companies with AirAsia Bhd holding a 49 per cent stake with US$40 million (RM127.2 million) investments, while Tata Sons and Telestra Tradeplace owning 30 per cent and 21 per cent shares, respectively.
BILQIS BAHARI
KUALA LUMPUR