With Chennai as its hub, Air Asia, the leading low-cost carrier in Malaysia, is likely to start operations in May.
“Our model is based on low fares. The fares could be 25-30 per cent less [than others]. We will make sure we deliver not just for a month but sustain it throughout the year,” said Mittu Chandilya, chief executive officer of Air Asia India.
“We may get the air operator permit (AOP) in about three weeks. Thereafter, we may commence operations in two months from Chennai,” he said in an interview to The Hindu on Wednesday.
Already, the Federation of Indian Airlines has opposed the entry of Air Asia stating this may force other airlines to run into further loss.
“Other airlines will have to drop fares and this will benefit passengers. They could even match my reduced fares but whether they can manage costs in the long-term has to be seen. But we can do it,” said Mr. Chandilya.
While the business scene in the Indian aviation industry has been gloomy with all the airlines, put together, recording a loss of $500 million in September 2013, Air Asia’s decision to venture in at this point in time, and with offers of free seats, can be quite a challenge.
“The industry has been dynamic and the best time to venture into something is when things are very bad. I firmly believe when you hit rock bottom, the only way is up,” he said. As for the free seats, he said they could be as many as 50 per cent or as little as 10 per cent, for certain flights and destinations.
“To operate out of Chennai was a natural choice since the brand is well-known here. There is a huge Tamil population in Malaysia and we fly out twice daily from Chennai. This market has been totally ignored by other carriers which have their base in Delhi or Mumbai. We aim to improve connectivity to Tier-II cities in the State,” said Mr. Chandilya.
The airline that operates A320 aircraft plans to add at least six of them the first year, and 10, on an average, each year henceforth.
In a joint venture with Tata Group and Telestra Tradeplace Pvt. Ltd, Air Asia India got approval for a $30-million deal from the Foreign Investment Promotion Board, last April, and a no-objection certificate from the civil aviation ministry, last September.