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HindustanTimes Thu,31 Jul 2014

AirAsia’s India flights may take off by December-January

Tushar Srivastava, Hindustan Times  New Delhi, September 18, 2013
First Published: 23:50 IST(18/9/2013) | Last Updated: 03:15 IST(19/9/2013)

You could see AirAsia’s airline in India early in the new year, or with some luck, by the end of the year.

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The aviation ministry is all set to approve as early as next week AirAsia India’s proposal to start airline operations in India and indications are that by December or early January, flights will take off,  reliable sources said on Wednesday. This would mark the real start of the Tata group’s much-discussed entry into the airline industry through a joint venture.

The no-objection certificate (NoC) from the aviation ministry would pave the way for a December-January launch of the proposed low-cost passenger airline. Once cleared by the ministry, the deal will go to aviation regulator, the Directorate General of Civil Aviation (DGCA) for its approval.

“The process can be completed in a month’s time but it depends on the documentation. We have a 36-point checklist covering airworthiness and operational issues,” DGCA chief Arun Mishra said.

The airline would then need to submit a schedule to be approved by the regulator.

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AirAsia India is a joint venture between Malaysian low-cost carrier AirAsia, the Tata Group and Arun Bhatia, a close relative of steel tycoon and ArcelorMittal chairman Lakshmi Mittal.

While AirAsia will hold a 49% stake in the proposed airline, the Tatas and Arun Bhatia will hold 30% and 21%, respectively.

AirAsia is Asia’s largest low-cost carrier in terms of fleet size and with a route network that spans more than 20 countries “We expect AirAsia to launch operations by early 2014,” said Kapil Kaul, CEO , South Asia, Centre for Asia Pacific Aviation (Capa), an aviation consultancy firm. “The final schedule operator’s permit (SOP) will take closer to three months or more as DGCA follows a more rigorous process before granting SOP which includes multiple preparedness meetings/ reviews.”

AirAsia Group CEO Tony Fernandes has promised “nano fares” and has said that the revenue management of Indian carriers is “very poor” and fares “just too high”. Earlier this month, domestic carriers almost doubled fares on key routes after a hike in fuel prices. Indian carriers expect AirAsia to unleash a price war offering “the lowest of low fares”.

“AirAsia will have a positive impact on the Indian market as we will see more dynamic pricing strategies, innovative marketing and an aggressive commercial pitch,” said Kaul.

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