JOIN USMalaysian low-cost carrier AirAsia initially plans to invest $30 million in its Indian joint venture airline with the Tata Group, its chief executive officer Tony Fernandes said on Wednesday.
“The potential of India was always there in my eyes. I was waiting for the market to become conducive for us so that we can stay here for a fairly long time and I think the tide is now turning very quickly. So, we felt that this is the right time to come to India,” he said, addressing a press meet.
Apart from this, the company is eyeing the Indian insurance market through its Tune Money venture. Tune Money is into travel protection plans and lifestyle protection plans.
It is also planning to expand its Tune Hotels — budget hotels — in India. Presently, it has one in Gujarat.
Fernandes was hopeful that the airline operations could start from October. Fernandes had met Civil Aviation Minister Ajit Singh on Tuesday.
The company has already applied for a no-objection certificate.
Asked how much marketshare the company has been eyeing in the Indian low-cost carrier space, Fernandes said: "I am not here to take away marketshare. But given India's potential of 1.3 billion population, this could be the largest AirAsia operation."
The company is planning to start from south India, with Chennai as its head office.
Fernandes said the airline can have many bases in the southern part of the country like Bangalore, Chennai and Kochi. He added that the ministers in south India were cooperative with him.
"A small thing, which we can do is to inform and educate the people about benefits of their travel. We are not here for vested interest, we are here to deliver. I see ourselves emerging as a vibrant airline company with two-three big players eventually."
He plans to offer even a few free air tickets when the airline starts operations in India.
The recruitment process for the Indian operations has started, AirAsia India head Mittu Chandilya confirmed. "We are recruiting around 200 people initially. We are hand-picking people."
On aviation turbine fuel (ATF) prices, Fernandes said though these were 30 per cent higher in the Indian market, the company will find ways to mitigate this.
‘India has bizarre rules’
Even before hitting Indian skies, Malaysian low-cost airline AirAsia Wednesday hit out at Indian aviation rules calling some of them “bizarre”.
"These are bizarre rules that you can't fly abroad before five years and 20 aircraft (fleet). ... These make no sense and is negative for the Indian airlines,” Fernandes said.
He was referring to the norms that an Indian carrier must complete at least five years of operation before flying abroad and have a fleet of 20 aircraft before being allowed to go overseas.
He said, on the contrary, in Malaysia, even one-plane airline can fly abroad. According to Fernandes, India is the only country which has such rules.
He also took a jibe at Indian airline industry saying that it has not done a good job to explain to the government about the importance of aviation for Indian economy.
Ferrnandes said India has lost many years because of people’s vested interest who could not think beyond themselves.
“Government should tell the people that aviation is good for the people," the AirAsia CEO said.