Commerce and Industry Minister Anand Sharma, AirAsia Chief Tony Fernandes and Ratan Tata

Ratan Tata, AirAsia Chief Tony Fernandes, AirAsia India CEO Mittu Chandilya and Civil Aviation Minister Ajit Singh

Tony Fernandes and Mittu Chandilya

Tony Fernandes addressing the press conference

Mittu Chandilya at the press meet

In a little more than a decade of existence, the Malaysian low-cost AirAsia has become the ‘airline of choice’ for the commoners. Unlike many of its low-cost counterparts who failed to survive in the aviation business, the airline has grown exponentially and if onlookers are to be believed, would dominate the Asian air space in the near future. The budget carrier nevertheless is now set to capture the Indian market and is hopeful that AirAsia India operations will begin as early as October this year.

‘We have a fantastic chemistry’

Addressing a press conference in New Delhi on July 3, the airlines Group Chief Tony Fernandes said that “India is fantastically located and can be a major international hub.” He informs that ‘low cost’ has and will always remain AirAsia’s USP. “I want to bring air ticket to a price where the drivers who drive me in India, can afford to fly.” While tickets on this airline will be available at a discounted price, food does not and will not come for free, neither a seat of your choice. “Nothing comes free,” says he.

‘India is fantastically located and can be a major international hub’

The AirAsia Chief believes that the market in India is now favourable and it’s the perfect time to enter. “Silly capital has gone out. Eight years ago, I said, I will never come to India as there are crazy guys in this business who had too much money to throw away. They have lost all their money now.”

The young and vibrant India Chief Executive Officer Mittu Chandilya seemed even more buoyant than his boss. Stating that he is bullish about India and that there is a huge opportunity in the country, he affirms that AirAsia India is a fantastic proposition. “My goal is to make AirAsia India bigger than AirAsia. My aim is to revolutionise completely and create an entirely new market. I am a competitor and will work hard.”

‘My goal is to make AirAsia India bigger than AirAsia and my aim is to revolutionise completely and create an entirely new market’

AirAsia India, a joint venture of AirAsia, Tata Group and Telestra TradePlace with a 49:30:21 holding, will connect to places which no other airlines connect and will bring India much closer to South East Asian countries. Recruitment process has already begun and the clearance from the Foreign Investment Promotion Board (FIPB) has been received. The airline is now hopeful that it will also get the no objection certificate (NOC) very soon.

Fernandes seemed extremely satisfied meeting the Union Finance P. Chidambaram, Civil Aviation Minister Ajit Singh, Commerce and Industry Minister Anand Sharma and Home Minister Sushil Kumar Shinde on July 2. During his visits, he was accompanied by AirAsia adviser Ratan Tata and AirAsia India Chief Executive Officer (CEO) Mittu Chandilya as well. “The Ministers here are smart,” he says, and adds that the team is explaining to the Ministers what is required and how will it have a multiplier effect.

Opining that airports should be more proactive, he said that there is no airport in India which cannot be full of people without proper infrastructure. His focus now is South and the airlines will start operations from its head office in the old terminal in Chennai and gradually expand to Cochin, Bengaluru, etc. Airport charges in Delhi and Mumbai are too high and the only solution he says is in having low-cost airports, which could be located far from the city. “After a few years, flying will be redistributed.” AirAsia transformed the quality of life of workers in Philippines and Malaysia, who could fly home on weekends. The airline now aims to do that in Kerala which has a major populace working in Dubai.

“The potential of India was always there in my eyes. But the market was not conducive and so I stayed back. There is much scope now although lot of change needs to be done structurally," he said, while answering to a query by Jayant Baranwal, Editor-in-Chief, SP’s Aviation, on the prospects of the Indian aviation market.

Malaysian-born Tony Fernandes’ had acquired the loss-making AirAsia for the token sum of one ringgit (about $0.26) and had a debt of $11 million. But Fernandes turned the company around making huge profits and launching many new routes. It took him seven years to persuade the Malaysian Government to let AirAsia fly to Singapore, but he was always optimistic. The AirAsia boss does not grumble about the Indian officialdom and says that Indian bureaucracy is great. “I have dealt with many governments and I find Indian bureaucrats knowledgeable.”

Recruitment process has already begun and the clearance from the FIPB has been received. The airline is now hopeful that it will get the no objection certificate (NOC) very soon.

Cost management is a key to his heart, states the AirAsia boss and remarks that Indian revenue management is too premature. The failure of low-cost airline Air Deccan he feels has been because of lack of a balance sheet and having two types of aircraft. Air India he said has had been a good airlines, but its management should now be with private enterprise. “If you cannot make an airline work in a 1.2 billion population then something is wrong,” he feels. Fernandes says that India has lost many years because of vested interests. “Too many people have vested interests and do not think of what India needs. Government should just think of what is good for India. Airlines should focus on opportunity.”

Unhappy with the Indian Government’s policy of allowing carriers to operate international flights only after five years of domestic operations, he says: “There are some bizarre rules. It is negative for Indian airlines.”

Neither the high aviation turbine fuel (ATF) cost in India nor the loss incurred by the airlines and subsequent closure of many airlines in the country deters Fernandes. And he has no business plans of importing ATF either. “The fuel price has increased from $30 to $130 since I started business 11 years ago, but our margins are better. ATF price is 30 per cent higher in India. I am dealing with it and it doesn’t bother me anymore. We will talk to the governments.”

To make things easier for new air travellers in India, AirAsia India plans to make booking air tickets easier. The tickets he said will in course of time be available in Tata retail outlets and the airlines will also rope in small travel agents, so that people without credit cards also can book. “Flying should be for everyone and not only the rich.”

Recounting the airlines failed relationship with Japan’s All Nippon’s Airways (ANA), Fernandes states that the partnership was disastrous. But he says Ratan Tata is fantastic. “We have a fantastic chemistry.” He says that while he has experience in aviation, Ratan Tata has experience of doing business in India and is highly revered in the country. “The partnership with Tata is sacred and is so with Arun Bhatia,” declares Fernandes.

Five years from now, Fernandes feels that there will be a lot of change with more and more people being able to afford to fly because of low fares. He says that competition will bring in more people, there will be low-cost terminals and more people will be able to get jobs in the aviation industry and the maintenance repair and overhaul (MRO) facility in Chennai will also come up.

Though the outspoken AirAsia Chief admits that there is no guarantee of success, he quickly adds, “You will see me for many years to come.” Welcome Aboard!