AirAsia India to take to the skies in Q4

KUALA LUMPUR, Feb 21 (Bernama) -- AirAsia India, the newly proposed joint-venture airline to serve the Indian population of 1.2 billion, is expected to begin its operations in the fourth quarter of the year.

Founder and Group Chief Executive Officer of the Malaysian-based frills-free airline Tan Sri Tony Fernandes said the timeframe was subject to all regulatory approvals being obtained from the Indian authorities.

Asked on the cost of investment for AirAsia India, Fernandes said it was still early to confirm, but went on to say that the cost of starting a new airline was usually around US$30 million to US$50 million.

"We have to get through the process. I hope we can get the approvals and start operations sometime this year, or maybe in the fourth quarter," Fernandes told Bernama via telephone from London.

On Wednesday, AirAsia, through its investment arm, AirAsia Investment Ltd, submitted an application to the Indian Foreign Investment Promotion Board to seek approval for AirAsia Investment to invest 49 per cent into a proposed Indian joint venture airline.

The joint-venture would be between AirAsia Investment and two Indian parties namely, Tata Sons Ltd and Arun Bhatia of Telestra Tradeplace Pvt Ltd.

The proposed airline plans to operate from Chennai, Tamil Nadu, and focus on providing domestic Tier II/Tier III city connectivity to Indian travellers.

Elaborating further on the joint-venture, Fernandes said Tata Sons and the Bhatia family would hold a 30 per cent and 21 per cent stake, respectively.

"The share capital is yet to be decided as we have to wait for necessary approvals," he said.

Asked on why AirAsia India selected Chennai as its hub, Fernandes said the Southern Indian region was viewed as the low-cost airline's "playground," given the enormous level of connectivity AirAsia offered to the southern cities from Kuala Lumpur and Thailand.

"We (AirAsia) know the area. That's our playground," he added. The low-cost airline currently operates Malaysia AirAsia, AirAsia Japan, Thai AirAsia, Indonesia AirAsia and AirAsia Philippines.

An AirAsia unit in India and China is said to be the ultimate aspiration of Fernandes, the brainchild behind the budget carrier's meteoric rise since its inception in 2001.