Air Asia-Tata airline venture to take off by year-end
AirAsia, Asia's biggest budget carrier, is hopeful that its proposed low-cost airline with the Tata Group and Arun Bhatia of Telestra Tradeplace Pvt Ltd would be airborne by the year-end. Tushar Srivastava reports. The Fernandes formulaindia Updated: Feb 22, 2013 02:08 IST
AirAsia, Asia's biggest budget carrier, is hopeful that its proposed low-cost airline with the Tata Group and Arun Bhatia of Telestra Tradeplace Pvt Ltd would be airborne by the year-end.
"We are ready as soon as we get the approvals," said AirAsia's founder and group CEO Tony Fernandes in a conference call. The time of the launch, he said, "was in the hands of the Indian regulator... but most likely it will start by the fourth quarter."
The CEO and the top management of the airline have already been picked up.
Fernandes, who plans to pump in $30-$60 million into the new venture, said AirAsia's strong brand and distribution network would be a differentiator. Promising a "very competitive product," he said the key weapon was cost.
"We have been very consistent for last 11 years," said Fernandes. "I would strongly disagree if someone would say that Indian aviation is a very competitive market. Put together, Indian carriers don't even have as many planes as in Malaysia when India's population is 50 times that of Malaysia."
He termed the partnership as the "final piece of our block".
"We have built a very powerful network from India to Japan covering all of Asia," he said, adding, the new airline would stick to the AirAsia brand.
Fernandes, known as much for incredible entrepreneurial spirit as for his flamboyance, didn't appear worried about the regulatory environment in India. "We have battled hard with regulators for 11 years. The regulators here are no different or difficult from other countries.
He said he had a fantastic partner in the Tata Group and the Indian partners will handle the regulatory and other issues while AirAsia will concentrate on the operational part. "We will leverage on each other's strength. It took three years of planning and finalising the right structure and partner before AirAsia finally took the decision (to enter the Indian market)." AirAsia had looked at many airlines and their cost structures before deciding to go the "organic way".
He said the airline will avoid some airports because of high charges that made "no sense".