BackAirAsia eyes 15-20% growth in India revenue
AirAsia eyes 15-20% growth in Indiarevenue
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Chennai: Malaysian budget carrier AirAsia Bhd is targeting an annual increase of 15-20% in its India revenue, in line with its global outlook, through an increased focus on flights to and from south India that are less than four hours long.
The airline is also open to starting domestic operations either through a subsidiary or a stake in an Indian airline when local regulations permit such moves by a foreign airline.
The carrier will seek additional sources to boost supplementary income to cope with the pressures of higher jet fuel costs, the European economic downturn and higher airport and other taxes, Tassapon Bijleveld, chief executive of AirAsia’s Thai subsidiary, said in an interview.
“We have to look at more ways to increase revenues besides charging for baggage, insurance, merchandise, tour packages, hotels and the duty-free goods sold on board," said Bijleveld, who spoke after a Chennai press conference on Friday evening. “Each of them is very small, but when you put them together, it adds up to 15-20% of revenue and comes at no additional cost," he added.
Earlier this month, AFP quoted AirAsia’s corporate finance head Aireen Omar as saying that AirAsia’s Thai unit is hoping to raise $200 million (around ₹ 1,000 crore) through a listing of its shares in Thailand this year.
In January, the airline—launched in 2001 by Indian-origin Malaysian entrepreneur Tony Fernandes—pulled out of the Delhi and Mumbai routes, citing higher airport charges, a year after it suspended its Hyderabad operations for the same reason.
An airlines analyst said the August 2011 launch of international flights by IndiGo could have triggered AirAsia’s exit from Mumbai and Delhi.
WATCH VIDEO
Tassapon Bijleveld talks about why South India is attractive for his airline and his expectations for revenue growth from the country as a whole
Air India Ltd, Jet Airways (India) Ltd and its low-cost subsidiary JetLite (India) Ltd, Kingfisher Airlines Ltd and budget carrier SpiceJet Ltd are the other Indian airlines that operate on international routes.
“When it started in India, AirAsia didn’t have competition from local carriers," said Sharan Lillaney, an equity researcher at Angel Broking Ltd. “AirAsia found the going in Mumbai and Delhi tough as IndiGo and SpiceJet were quite competitive and, therefore, it exited these routes."
With the most recent route cuts, AirAsia is refocusing on Tamil Nadu, where it launched its operations in 2008 with flights between Kuala Lumpur and Tiruchirapalli (Trichy). Most flights between south India and South-East Asia take less than four hours, so it allows an aircraft to optimize costs.
“If a route is not profitable within 12 months, we let it go," said Suresh Nair, regional manager (India, Sri Lanka and Bangladesh) at AirAsia. The airline currently offers direct flights from Kolkata, Trichy, Chennai, Kochi and Bangalore to Bangkok and Kuala Lumpur.
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