Air Asia set for equity infusion, fleet expansion, overseas flights

15 Sep 2016


AirAsia India is on course to achieve a fleet size of 20 by end-2018, after which, it will start flying on international routes, its chief executive officer Amar Abrol said in Hyderabad on Wednesday.

 He announced the induction of the eighth A320 aircraft, slated to fly on a new route between Hyderabad and Kochi from 8 October, as well as a second round of funding. 

According to Abrol, the airline is in the final stages of approval to receive a 'few multiple millions of dollars' of equity infusion from the two joint venture partners, Tata Sons and Air Asia. The initial tranche of $30 million has been fully utilised, he said.

Appointed in May, the new CEO brimmed with confidence, saying the progress and performance on multiple fronts has been taking the airline in the right direction.

''Since April, we have gross profit breaking even. The next milestone is to get cash-flow positive. Eventually, like any other investor, my shareholders, my board require us to achieve EBIDT (earnings before interest depreciation & tax) break-even as well. We will get there,'' Abrol said.

 The airline has been operating with a passenger load factor (PLF) of 84-85 per cent and a 25-minute turnaround time - the best in the industry in terms of PLF and cost optimisation, though there has been tremendous pressure on yield, an issue the whole industry was faced with and which needs to be fixed, according to Abrol.

Responding to a query, Abrol said there was ample scope to grow for every airline in India, with availability of demand and untapped routes.

There are 330 pairs of routes where an A320 aircraft can be operated, compared to just 120 pairs of routes touched by the largest competitor as of now. AirAsia India services are present across 22 pairs, while a clear picture on the overall market opportunity is expected to emerge, once the aviation ministry comes up with the list of tier-I and -II cities for new connectivity. ''We are not just looking at a few routes but are building a network of connectivity to serve India,'' Abrol said.

He also said the company was open to a mix of fleet in place of only A320s and inorganic opportunities, going forward.

The company has started the recruitment process of pilots, cabin crew and ground staff required for the new aircraft, as it requires five to nine months to ready manpower. Soon, the company will be opening its own training facility to train pilots and other crew and is also open to import talent from outside India, according to Abrol.

Meanwhile, AirAsia India also announced a free lifetime flying offer on all the its flights across its network for the Indian Olympic gold medal winners, a five-year free flying for silver medallists and three-year free flying offer for the bronze winners of the Rio Olympics and the ongoing Paralympics.

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