India’s civil aviation policy protecting some players, says AirAsia chief

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AirAsia Group chief executive officer Tony Fernandes. (Reuters) AirAsia Group chief executive officer Tony Fernandes. (Reuters)
SummaryAirAsia would largely focus on markets in south India.

Terming the current aviation rules, which specify a minimum of five years of operations and a fleet of at least 20 aircraft for airlines to be eligible to fly abroad, as devoid of any sense, AirAsia Group chief executive officer Tony Fernandes said on Wednesday that these regulations have obvious protectionist underpinnings.

“I think the five years (of operations) and 20 aircraft rule for allowing an airline in India to fly abroad makes no sense. It is negative for Indian airlines... AirAsia Malaysia, as a one plane operator, can fly into India. It (the rule) has probably been put in by Naresh (Goyal) or someone like that to protect themselves,” he said during his maiden press conference in Delhi.

Betting big on India, he also said that the country is strategically located and they can operate flights from the southern part of the country within a four hour circle to destinations in Africa and on the Gulf route such as Doha, Nairobi, Maldives, Karachi, Bangladesh and some cities in China.

He also announced that AirAsia would largely focus on markets in south India and move upwards upon development of low-cost terminals in metros such as Delhi and Mumbai.

“Over the next five years, AirAsia would look at lowering fares to boost air travel in the country,” he said.

Fernandes, however, feels that the structure of Indian aviation needs a change and they have started the beginning.

“Deccan Airlines got the pricing right but went down, as it did not have the balance sheet and people priced it out of the market. Vijay Mallya and Naresh said we have cash... Let’s make him lose cash.”

It is expensive to operate two types of aircraft that also added on to costs for Deccan.

Fernandes also feels that the Indian government should not be in the business of running an airline.

“Air India was a fantastic product when it was young but it should not be run by the government,” he said adding he was not interested in picking up a stake in the national carrier.

AirAsia India chief executive officer Mittu Chandilya said that he was bullish

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