Indias civil aviation policy protecting some players, says AirAsia chief

Written by ENS Economic Bureau | New Delhi | Updated: Jul 4 2013, 14:15pm hrs
Tony fernandesAirAsia Group chief executive officer Tony Fernandes. (Reuters)
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... Lets 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 on the aviation sector in India.

When I joined I said I want to see AirAsia India bigger than the entire Group. I am a competitor. I want to revolutionise the air travel market here.

AirAsia Group plans insurance foray

New Delhi: AirAsia Group is planning an entry into the Indian insurance market through Tune Money. The venture will be separate from the companys airline business.

Apart from our airline venture, we have low-cost hotels and are also planning to grow our insurance business in India. A separate team is working on this business that will provide travel, accidents and personal insurance, said AirAsia CEO Tony Fernandes. The Group already has a Tune Hotel operational in Gujarat. While Expedia would continue to be at the forefront of AirAsias distribution set-up, the airline would not preclude other modes of boosting sales. The idea is to allow customers, who do not own credit cards to purchase tickets online. We will also encourage the use of prepaid cards, he said. ENS