AirAsia India possible if policy amended, says Tony Fernandes

KUALA LUMPUR: As the Indian government is considering to allow foreign airlines to acquire stakes in ailing Indian carriers, low-cost carrier, AirAsia Bhd, is mulling the possibility of entering the second-most populous country with over 1.2 billion people.

Tony Fernandes

AirAsia Chief Executive Officer Tan Sri Tony Fernandes said AirAsia would explore opportunities in India if the country's aviation policy was amended.

"The current policy does not allow us to go in (to enter into any joint-venture). If the policy is amended, we will explore opportunities.

"AirAsia is continuously looking out for opportunities. That is how we established almost all our units.

"India will definitely be a huge market for AirAsia," he told Bernama in an interview.

On Wednesday, AirAsia Japan Co Ltd, a joint venture between All Nippon Airways Co and AirAsia Bhd was launched, adding to the series of other low-cost airlines namely Thai AirAsia, Indonesia AirAsia and AirAsia Philippines. An AirAsia unit in India and China is said to be the ultimate aspiration of Fernandes, the brains behind the frills-free airline's meteoric rise since its inception in late 2001.

Last month, Indian Minister of Commerce and Industry Anand Sharma was quoted as saying that the government had already received a request from the Indian aviation industry and discussions were ongoing. At present, foreign direct investments (FDI) of up to 49 percent is permitted in India's airline sector but foreign carriers are not allowed to buy equity due for security reasons.

Looking into the demands of the cash-strapped aviation industry, the government, on January 17, decided to work on a proposal to allow foreign airlines to acquire equity up to 49 per cent in Indian carriers. India's aviation sector is becoming worse by the day with mounting debts, widening losses, pilot strike, the shutting down of overseas operations and with no sign of a solid recovery plan in sight for now. Of the six major airline operators, five are in red with the exception of Indigo, a no-frills airline.

AirAsia operates daily flights to and fro Bangalore, Tiruchirappalli, Kolkata, Kochi and Chennai from the Sepang Low Cost Carrier Terminal. Its long-haul subsidiary, AirAsia X, was flying to New Delhi and Mumbai but the sectors were suspended under a route rationalisation plan.

On another development, Fernandes denied speculation that AirAsia received an air operator's certificate from the Singapore government to start a low-cost hub in the island republic. He said to-date, AirAsia had not received any verbal or written agreement from the authorities. "Singapore has been our long time target. We always have been seeking for the licence but for the time being, there is no green light on the matter," he said.

Meanwhile, when asked about collaboration talks between Malaysia Airlines and AirAsia, Fernandes said: "The talks are progressing well. For now it is almost 40-50 percent complete." The collaboration talks came after the share swap deal between the national carrier and AirAsia was reversed early last month. 

-Bernama.