AirAsia India gets licence to fly

08 May 2014


AirAsia India, the Indian joint venture of Malaysia's AirAsia Bhd with the Tata and Telestra Tradeplace has finally received an air operator's permit from the Director General of Civil Aviation (DGCA), allowing it to start operations.

The new airline is 49 per cent owned by AirAsia while Tata group holding company Tata Sons Ltd owns 30 per cent and Telestra Tradeplace Pvt Ltd has 21 per cent in the venture.

"History has been made today in Aviation. Everything has been hard for AirAsia but we will never give up," Tony Fernandes, chief executive of AirAsia, said in a message posted on his Twitter account.

The approval, however, is subject to the final decision of the Delhi High Court which is hearing a petition by BJP leader Subrmanian Swamy against the grant of permit to AirAsia.

AirAsia India's entry into the crowded Indian market where most local carriers are losing money has been opposed by almost all domestic carriers, according to Fernandes.

AirAsia India, which is based in Chennai, will launch services with one Airbus A320 jet initially, adding one aircraft a month in its first year of operation, chief executive Mittu Chandilya had said last year.

AirAsia India will operate flights to tier II and III towns in South India and open up new routes. It had listed Bangalore, Trichy, Madurai, Coimbatore, Kochi, Goa, Hyderabad, Ahmedabad, Jaipur and Pune as line stations or destinations.

Air Asia, Southeast Asia's largest airline by fleet size, hopes to offer attractive fares, including free tickets, in India despite the high cost of operations.

Indian carriers are facing a losing market because of a host of issues, including the high costs of jet fuel and airport infrastructure. Intense competition adds to the problem as it makes difficult for airlines to raise fares.

A slowing economy has also crimped demand for both business and leisure travel.

AirAsia India is the first airline formed after India, in September 2012, relaxed rules and allowed foreign carriers to own up to 49 per cent stake in domestic airlines.

Tata Group also formed a separate joint venture with Singapore Airlines Ltd to start a full-service carrier.

Meanwhile, Jet Airways (India) Ltd, the nation's second-biggest carrier, has sold a 24 per cent stake to Etihad Airways.

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