AirAsia India to launch with 10 A320s, wants obstacles lifted
AirAsia has sought to import 10 Airbus A320s for its India operations
New Delhi: AirAsia India, the budget airline of Tata Sons Ltd and Malaysia’s AirAsia Bhd, will start with 10 Airbus A320s aircraft in the fist phase of its operations.
AirAsia has sought to import 10 Airbus A320s for its India operations, which are all likely to be brought in within a year or roughly about one per month, said two government officials who declined to be named.
AirAsia Bhd has a 49% stake in AirAsia India, Tata Sons has 30%, and Arun Bhatia’s Telestra Tradeplace Pvt. Ltd owns the rest. AirAsia India won approval from the government in March and is now in the process of getting an airline license from regulator Directorate General of Civil Aviation (DGCA).
AirAsia’s group CEO Tony Fernandes has asked the government to remove obstacles that are being placed in the airline’s path in India.
A November application by AirAsia for importing aircraft into India has not yet been approved by the aviation ministry, said the first government official cited above.
Officials fear an unfavourable verdict on a lawsuit filed by Bharatiya Janata Party politician Subramanian Swamy challenging the approval given to AirAsia India’s application. Only existing airlines can get foreign investments, according to Swamy’s interpretation of the government policy.
A Delhi high court bench is scheduled to hear the matter again on 11 December. In the previous hearing, the court had said “let them (government) take a decision. If we have to quash it, we will".
The import permissions are subject to Air Asia India getting an airline licence. The aviation regulator needs to ratify pilot, cabin crew and engineering certifications in conjunction with the type of aircraft being imported and therefore till an aircraft import letter is in place, the process cannot be completed, said the second government official.
Besides this, AirAsia, which completed 12 years of operations on Sunday, has sought permission to carry out aircraft maintenance and crew training for its Indian unit in Malaysia to save costs.
The DGCA has told AirAsia India CEO Mittu Chandilya that while some exemptions may be granted to the airline to use its Malaysian facilities after certifying them, the regulator would like to see some key AirAsia facilities in India.
Group CEO Fernandes said in an interview that AirAsia India was working with the Indian regulator. “DGCA has been fantastic and interested to learn how AirAsia has developed air travel in Asean and how low-cost travel has clearly failed in India. We have enjoyed working with all regulators. There is no delay in the application. The courts have made it very clear that there is no slow down. Not sure why this is an issue."
Asean is short for the Association of Southeast Asian Nations.
Fernandes said he was not even sure why AirAsia India’s application starting an airline was being opposed.
If Indian conglomerates like Mahindra and Mahindra and Tata group go global and invest overseas, AirAsia should also be allowed entry into India, he said.
“Imagine if Mahindra and Mahindra was not allowed to expand overseas or even Tata. India has great companies that are global," he said.
“So why have protectionist policies."
Fernandes said he will welcome IndiGo, the Indian budget airline run by InterGlobe Aviation Pvt. Ltd, launching an airline in South-East Asia.
In a slight change of stance, Fernandes said AirAsia was in no rush to launch the India subsidiary.
“We start when environment is right. I’m here for the long term and make a meaningful difference to the people of India. I’m here to create jobs. Create economic growth. So we will start when we can do that," he said.
New York-based former Jet Airways (India) Ltd CEO Steve Forte said there was nothing “wrong with utilizing existing resources already established in Malaysia for training, heavy maintenance and other functions".
He further said, “On the one hand, it is very logical to use existing resources from the ‘mother airline’ to maintain low costs and to have instant expertise available. On the other hand, it is understandable that the GoI (government of India) wants to ensure that jobs are created in India. We went through the same problems with Jet Airways when I was in Mumbai."
AirAsia’s entry is likely to intensify competition for India’s airlines, leading to fare cuts. Fares for a return Delhi-Mumbai flight have soared to ₹ 21,000 for economy travel, making some international flights cheaper in comparison.
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