News Backgrounder
AirAsia India to bypass Delhi, Mumbai
April 1st 2013
When the AirAsia group was given the thumbs up to launch AirAsia India last month, there were a couple of surprises in store. Read More »
Firstly, the airline’s founder, Tony Fernandes, announced the new carrier would avoid India’s two major hubs, Delhi and Mumbai. Secondly, the civil aviation ministry was upset with the Foreign Investment Promotion Board (FIPB) for granting approval.
The low-cost carrier (LCC) is set to take up to 49% in the new venture, with India’s Tata group taking 30% and Telestra Tradeplace funding the remaining stake. AirAsia is initially investing US$15 million in the airline.
It is hoped the airline will be flying as early as mid-year. Details of fleet plans have not been revealed, but the carrier will operate A320s. AirAsia Group has 475 A320s on order.
AirAsia India will be based in Chennai. In a media conference call, Fernandes said: “We will avoid certain airports like Delhi and Mumbai because of high charges. These airports also are slot constrained.”
Landing and other charges at the two major airports are at least 25% higher than other centres. Also, they do not have low-cost terminals.
The Minister for Civil Aviation, Ajit Singh, argued that India’s new policy which allowed foreign airlines to invest in the country’s carriers, applied only to existing airlines and not new ventures such as AirAsia India.
However, commerce and industry minister, Anand Sharma, virtually dismissed the aviation ministry’s argument. “I am sure this decision has been made after very careful scrutiny by the FIPB,” he said.
* Philippines AirAsia (PAA) has entered into a strategic alliance with local low-cost carrier (LCC), Zest Airways. It has taken a 49% stake in the airline and acquired 100% of its holding company, Asiawide Airways.
