Malaysian budget carrier AirAsia, which has formed a joint venture with Tata Group and another local business partner Arun Bhatia to operate a domestic low-cost airlines, expects to kick off operations in India by April this year, the company’s chief Tony Fernandes told the CNBC TV-18.
He was speaking at an interaction at Davos where he is attending the annual World Economic Forum (WEF).
This would make it the first new airlines with foreign strategic investor to fly within India. Jet Airways recently brought on board Etihad as an investor in its existing business.
AirAsia’s operations are already behind schedule as the firm originally targeted starting flights by Diwali or around October 2013.
Last September, AirAsia obtained No Objection Certification from the Ministry of Civil Aviation to start flying from the country. After this, the company applied to get approval from the aviation regulator Directorate General of Civil Aviation for the same.
AirAsia has plans to operate a fleet of Airbus A320-200 aircraft, initially with four-five planes and then augment it to 10 in a year for its domestic operations. It already operates international flights to India connecting various cities like Chennai, Bangalore, Tiruchirappalli, Kochi and Kolkata to Southeast Asia.
AirAsia owns 49 per cent in the three party JV with Tatas owning 30 per cent and remaining 21 per cent is with Telstra Tradeplace (owned by Arun Bhatia). It will compete with other budget carriers such as IndiGo, SpiceJet and GoAir besides some new players such as Air Pegasus.
The government had opened up the sector to foreign strategic investors, allowing FDI up to 49 per cent last year.
Tata Sons, one of the minority partners in AirAsia India, also announced a separate JV with Singapore Airlines to launch a full-service carrier. One of the partners of AirAsia India, Arun Bhatia had publicly voiced his displeasure as he was not informed of the parallel move by Tatas in the aviation business in India. Tata had clarified that it had kept AirAsia in the loop for its separate proposed venture.
(Edited by Joby Puthuparampil Johnson)