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TMCNet:  Worst reception in India: AirAsia CEO Tony Fernandes [India Business] [Times of India]

[July 05, 2014]

Worst reception in India: AirAsia CEO Tony Fernandes [India Business] [Times of India]

(Times of India Via Acquire Media NewsEdge) BANGALORE: AirAsia chief executive Tony Fernandes says the worst negative reception he has had to face in any South East Asian market that his airline has entered was in India.

"I found the reaction of the airline industry quite hostile and quite counterproductive, something I have never experienced before," said Fernandes, who has steered the budget airline from carrying 200,000 passengers per year, 13-years ago, to 51 million passengers at present.


He said his lawyer in India was the happiest man, because he made so much money from all the court cases that were filed against AirAsia India by its peers over the last 14 months.

"When an airline comes into Malaysia, I compete, I don't try and block them because it's a waste of energy. Put people first and let people decide. The days of monopoly and cartels have gone," said Fernandes.

AirAsia India began operations last month with two routes -- connecting Bangalore to Chennai and Goa. Fernandes said that the company would add six more aircraft to its current fleet of one aircraft, by the end of this year. The airline has revised its growth plans. It previously planned to operate to nine cities by the end of this year, now that plan is for 13 cities, including in the North and North East markets.

Fernandes added that the company has plans to fly to international destinations such as the Gulf region, Africa, South East Asia, and island nations like the Maldives. However, this is subject to the government revising the existing 5/20 rule, which allows Indian airlines to fly abroad only after completing five years of operations and having a minimum fleet of twenty aircraft.

"If the tax regime for the airline industry changes, in particular on ATF (aircraft turbine fuel), and if there is a revision to the 5/20 rule, then India can grow faster than Malaysia. AirAsia India can be one of the biggest companies for us and we could have 500 aircraft here," said Fernandes.

AirAsia India is a joint venture between Tata Sons, Telestra Tradeplace and AirAsia, which holds 49% stake. Fernandes, along with Ratan Tata, chairman emeritus of Tata Sons, was taking the AirAsia India flight from Bangalore to Goa on Thursday.

The 50-year-old Malaysian-Indian stressed that he wanted to bring 'democracy in air travel' and that the Indian aviation regulator, Directorate General of Civil Aviation (DGCA), must not restrict innovative business practices. Last year DGCA had allowed airlines to 'unbundle fares' -- giving them an option to levy charges for seats and other frills -- but clamped down on AirAsia India when it asked passengers to pay for check-in baggage.

"That's a really big step backwards, but I'm sure it will change soon. You come to the airport with six bags and I come with none, I'm subsidizing you because the airline needs people to carry your bags and has to pay more for fuel," Fernandes said.

(c) 2014 Bennett, Coleman & Company Limited

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