AirAsia promises 'dramatically' low fares in India, expects launch in March-April

Davos: Hopeful of launching flights in India in next 2-3 months, AirAsia chief Tony Fernandes says that the airline would introduce 'dramatically' low fares in the country, which would be cheapest in the market and take air travel to masses.

Read here: Jet Airways too offers low fares for subsidiary

Fernandes, who is here for World Economic Forum (WEF) Annual Meeting, said that AirAsia India is fully prepared from its side for the launch and is waiting for final government approvals that should come soon and help it begin flights by March-April this year.

"I think we are coming very close and March-April should be time when we should begin the India operations," the Malaysia-based airline major AirAsia's Chief Executive Officer told PTI in an interview here.

AirAsia has partnered with Tata group and Arun Bhatia-led Telstra Tradeplace for AirAsia India, which is looking to run low-cost passenger airline service in the country.

Fernandes said that all preparatory work has been completed by the company for launch of its flights and it is just waiting to "open the sale" of the tickets.

Known to have revolutionised the airline market in Malaysia and some other Asian countries through low-cost airfares, AirAsia chief said that the strategy for India would be to offer 'cheapest' possible tickets.

"We have to be the cheapest and stimulate the market. We have to allow the common man to fly. That is my message to the Indian government and the state governments that flying is not only for the rich," he said.

"What I want to say is that flying is a great economic driver and to get more people flying, we have to reduce the costs. This may be hard for the state governments, because aviation fuel tax is a good cash cow, but if you see in medium to long term, the benefits of flying are huge. You can see the success in Malaysia, Thailand, Indonesia and many other places and we can do the same in India as well," Fernandes said.

High taxes and other costs have been a major reason for AirAsia thinking to start its domestic flights in India with Chennai as a hub and not the bigger centres like Delhi and Mumbai.

Expressing optimism, Fernandes said that some state governments are open to the idea of lowering air travel costs and more states are looking at this.

When asked whether people should expect dramatically low prices at the time of launch of flights in India, which AirAsia has done in other markets, Fernandes replied in affirmative. 

"Expect that from us. We are dramatic when it comes to pricing and we will do the same in India," Fernandes said.

Asked whether he was also optimistic about AirAsia India soon going pan-India with its flight operations, Fernandes said, "Give me some time. India is like a continent. It is not one state. So, give me some time. I don't want to lie and say that we would be pan-India by so and so date."

On whether he intended to take AirAsia India to pan-India level, he said, "Of course, we want to. If you want to go to India, you would want to go everywhere in India. But it will happen in due course as we must do it properly. But patience is important as many have tried to do it too fast and they have failed."

Asked about Tata group forming another airline venture with Singapore Airlines, in addition to the one with AirAsia, Fernandes said, "I am sure there will be some crossover (of business), but Tata-SIA would focus more on full service carrier market, while AirAsia would create an entirely new category for itself."

He also said that existing low-cost carriers in India were kind of in both categories - budget and full service airline services - and some of them have started going into higher ends of markets by putting in business class seats and offering certain upmarket services. 

Next: HC reserves order on stay of Tata-AirAsia operationalisation

HC reserves order on stay of Tata-AirAsia operationalisation

New Delhi: The Delhi High Court on Thursday reserves its interim order on a plea of BJP leader Subramanian Swamy seeking a stay on the operationalisation of USD 30 million deal between Tata Sons and Malaysia-based AirAsia.

"We will pass the order," a bench comprising Chief Justice N.V. Ramana and Justice Rajiv Sahai Endlaw said after hearing arguments of Swamy and Solicitor General (SG) Mohan Parasaran, who appeared for the Centre.

"Now the announcement has been made by the Airlines that it is about to start its operation in India. A stay is needed as a third party interest would be created. The deal was against public interest and rule of law," Swamy said.

The plea was opposed by SG Parasaran and senior advocate Abhishek Manu Singhvi, who appeared for Tata-AirAsia.

Earlier the bench had suggested Swamy to approach the concerned ministries with his grievances relating to the deal. The BJP leader, in his plea, has sought a direction restraining the Centre from taking any decision or granting any other approval contrary to the applicable FDI policy and DGCA guidelines or granting any approval for foreign investment by a foreign airlines in a greenfield airline project.

Swamy had first moved the apex court which had asked him to withdraw the petition and approach the High Court. In April last year, the Foreign Investment Promotion Board (FIPB) gave clearance to the USD 30 million deal.

Swamy's PIL opposes clearance to the deal on the ground that according to government policy, foreign direct investment (FDI) up to 49 per cent is allowed in existing airlines which are already in operation and not to new or proposed joint ventures.

Swamy in his PIL has alleged that the deal is "clearly contrary to the FDI policy" and also against "the guidelines notified by the nodal ministry, the Union Ministry of Civil Aviation, which does not permit foreign investment by a foreign airline, in such a greenfield airline".

AirAsia Berhad, a public listed Malaysian company which operates AirAsia through its wholly-owned investment vehicle Air Asia Investment Ltd, had in February entered into an agreement with Tata Sons Ltd and Telestra Tradeplace Pvt Ltd to set up a joint venture company for passenger airline business in India.