Smaller cities key to AirAsia's aggressive flight plan for India
funding of the JV company will be undertaken on the basis of business needs,” AirAsia’s FIPB proposal states. The airline will start off with 3-4 aircraft and have a staff of 300.
Fernandes said that an Indian management team has already been picked. “We have already picked the management team and I was very impressed. We will announce the CEO in two-three weeks,” he said.
“Chennai is the obvious place to start off with since we already operate from there and also we know that region better,” he said.
For the moment, AirAsia’s plans are endorsed by analysts and consultants who say the carrier will be able to replicate its success in India.
“We think this is negative for the Indian carriers, especially SpiceJet given its major presence in Chennai and tier II/III cities exposure,” said Corrine Png, analyst at foreign brokerage firm JP Morgan. “With traffic under pressure, it would be challenging to sustain higher yields and the entry of new players could put pressure on pricing.”
Consultants say AirAsia has its plan well thought-out. “They are going to be entering with a low investment, not taking the baggage of any debt or existing brand name and they are targeting an untapped marketl; it’s a brilliant model,” said a consultant at a global audit and consultancy firm on condition of anonymity as the person is involved in negotiations for other airlines. “It is the best way to enter this market.”
However, Aviation consultancy firm Centre for Asia Pacific Aviation said AirAsia may have found the
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