AirAsia Bhd sells 80% of its tickets through the Internet in its home country Malaysia to save on costs, while airlines in India depend on agents for 80% of their sales. Analysts say the airline can’t diverge much from Indian market realities to be able to survive.
Track India Pvt. Ltd, an associate company of AirAsia India, sent mailers to travel agents last week inviting them to register with the airline.
“It is pleasure to announce that we are offering you an Air Asia login ID for issuing AirAsia tickets with more freedom!!! The first step to a mutually beneficial relationship is to become a registered agent with us," one such email read.
AirAsia India is awaiting final approvals from the civil aviation regulator and is likely to get its flying licence by the end of April.
The airline is a joint venture between Malaysia’s AirAsia, Tata Sons Ltd and Arun Bhatia of Telestra Tradeplace Pvt. Ltd.
Mittu Chandilya, chief executive officer of AirAsia India, had said the airline was open to all distribution channels.
“We do have an online selling plan. But we cannot ignore travel agents, too. Therefore, we will have a mix of different strategies at this point of time," Chandilya had said in an interview on 1 July.
An AirAsia India executive, requesting anonymity, said the airline faces only two minor hurdles in getting the final approval.
AirAsia India is awaiting air operating permit (AOP) from the regulator.
In February, regulator Directorate General of Civil Aviation (DGCA) dismissed a collective demand by all private airlines in India, including IndiGo, Jet Airways (India) Ltd, SpiceJet Ltd and GoAir, objecting to the grant of a licence to AirAsia India, arguing that a September 2012 policy change allowing foreign airlines to invest in local airlines was applicable only to existing airlines and not new ones.
The airline also got a breather from the Supreme Court, which refused to pass any interim order on a plea by the opposition Bharatiya Janata Party’s Subramanian Swamy seeking to restrain the Centre from granting further approvals to operationalize the AirAsia India deal.
“We will be getting the licence well before this month. Then we will be planning about opening our website for booking," the executive said.
Saroj K. Datta, an aviation consultant and a former executive director of Jet Airways, said that barring some tweaking in salary structures and leasing of planes, AirAsia India could do things drastically different from other airlines.
“I honestly feel there are very limited things what AirAsia India can do differently from other markets and what other Indian low-fare airlines are not doing already. Though AirAsia is starting from Chennai to avoid high airports fees..., it will have to connect to more destinations," Datta said.
AirAsia could probably align its domestic network to link to various international flights of AirAsia group similar to a network airline offering connections beyond a domestic point, Datta said.
“We think that AirAsia will have to prepare for a long-drawn battle in India," said Hitanshu Gandhi, senior consultant at Strategic Decisions Group International Llc, a consultancy firm.
Gandhi said AirAsia has claimed that it would have lower employee-aircraft ratio compared to other airlines and higher aircraft utilization rates.
“Ultimately, their success will have to mirror IndiGo’s trajectory—choose routes smartly, leverage a lot of efficient practices, learning from its parent, and patiently eliminate weaker competition from the market over time. While AirAsia may be able to bring in some efficiencies and IT (information technology) best practices from their parent company, they would have to adapt it to Indian realities," Gandhi said.