Budget carrier AirAsia plans flights in India soon

May 23 2014, 21:02 IST
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Despite a market of 1.2 billion people, airlines in India are unprofitable due to high costs and cut-throat competition. Reuters Despite a market of 1.2 billion people, airlines in India are unprofitable due to high costs and cut-throat competition. Reuters
SummaryDespite a market of 1.2 bn people, airlines in India are unprofitable due to high costs.

Asia's leading budget carrier, AirAsia, is hoping to begin operations in India in two to three months, the airline's CEO said today.

The carrier this month won court approval to operate in India after delays because of domestic airlines' opposition. AirAsia India will begin flying with two planes, Tony Fernandes, AirAsia group chief executive officer, told reporters.

Despite a market of 1.2 billion people, airlines in India are unprofitable due to high costs and cut-throat competition. But Fernandes says AirAsia has studied the market for a long time and "we feel moderately optimistic."

He spoke in Manila where he attended the World Economic Forum on East Asia.

He said with a new government in place, a wave of optimism and a strengthening rupee and stock market, "it's a good time to be in India." Prime Minister-elect Narendra Modi is to be inaugurated on Monday.

"There's a billion people there, how strange if we can't make it work," Fernandes said.

But despite the optimism, he said the carrier will start with only two planes and "we're just going to dip our toes, we won't sink our whole body there."

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