While passengers will enjoy cheaper fares, other stakeholders too, will benefitA NEW HIGH
AirAsia has entered the Indian aviation scene and its plan to make Chennai its hub of operations has brought cheer to stakeholders.
There is great hope of a positive growth trajectory for the various service sectors that have mushroomed around the industry. This is apart from additional revenue that the Airport Authority of India (AAI) might get.
On Tuesday, the Foreign Investment Promotion Board (FIPB) of the Finance Ministry cleared the proposal of Malaysian low-cost carrier AirAsia and Tata’s joint venture for a passenger airline in India. But the airline is yet to get the flying permit and clearances from the Directorate General of Civil Aviation (DGCA.).
Flyers, who are set to be one of the biggest beneficiaries of this venture, said that apart from the affordability, the fact that new airline’s fleet consists of Airbus A-320s is great news. Kishor Dandekar, a chartered accountant who flies frequently, said, “With some of the existing low cost carriers operating with ATR flights now, the leg space and seat width are always a concern; sometimes we feel claustrophobic. So, AirAsia may be a relief to budget passengers as they may experience comfort even at lesser cost. It will be convenient if they are punctual, unlike some of the other low-cost carriers.”
The development is also likely to be a shot in the arm for hotels and taxi services. Officials of Fast Track, a taxi service which earns 25 per cent of its revenue from the airport, said they were hopeful of at least five per cent growth in revenue. “At least 2,000 of our 5,000 vehicles ply in and out of the airport every day. With this development, we may see about five per cent increase. This will rise further if their fleet expands,” said an official.
Similarly, the hotels, especially 3-star ones, may see a rise in bookings of up to 10 per cent, said M. Venkada Subbu, president of Tamil Nadu Hotels Association. “Apart from tourists and business travellers, we have people from India and abroad coming in for treatment. They will also benefit from this venture,” he said.
AAI is set to be another winner as AirAsia plans to make Chennai its nerve centre. “As a direct payment, they may contribute towards several services including parking, landing and navigation route charges and User Development Fee (UDF). They may also want to take the hangar space since they plan to have Chennai as the hub. They may provide an indirect contribution through service providers at the airport too,” an AAI official said.
While it may be premature to quantify the increase for AAI as the airline is yet to reveal its complete plan, including the fleet size, fare price and the potential destinations, it would at least be to the tune of 5-10 per cent, he said.
“A vacuum was created in volume of passengers when Kingfisher stopped operations. This situation worsened with the high fares charged by airlines in the last several months. With many airlines reducing the fares recently, things may improve. And, the operations of this airline may bring in added stability,” said airport director H.S. Suresh.
In addition to AAI, hotels and taxi services are also looking at increase in