AirAsia chief upbeat about India operations

AirAsia India has made "tremendous progress" in its efforts to secure approval to start operations in the populous nation, and the budget carrier could be up and running within three months of getting the green light, said AirAsia group chief executive Tony Fernandes.

"India will start when the Indian government allows us to start," said Mr Fernandes. "We've made tremendous, tremendous progress. Let's see over the next few weeks what transpires. From the moment we get the approval, it will take us two to three months to get our act together."

AirAsia India is a joint venture between AirAsia, the Tata Group and Indian investor Arun Bhatia.

The Hindustan Times newspaper reported this week, citing sources, that a no-objection certificate from the Ministry of Civil Aviation could come as early as next week, after which the proposal would go to the Directorate General of Civil Aviation for approval.

It has previously been reported that AirAsia was initially hoping to get the airline off the ground by October, ahead of the year-end peak travel season.

Mr Fernandes emphasised his bullishness with regard to aviation in India, notwithstanding the challenges facing the industry, such as high operating costs and the lack of infrastructure. "It's having the right product. It's about getting the guys who've never flown before," he said.

The budget carrier plans to serve airports in secondary and tertiary cities.

AirAsia has not given up on Japan either, following the dissolution of its joint venture - previously AirAsia Japan and now Vanilla Air - with All Nippon Airways.

"We've rehired our chief executive officer from the joint venture, he left ANA. We will enter if we think we can make it work. We're getting some fantastic opportunities from airports. I've had big airports come see me wanting to work with us," Mr Fernandes said.

In town for the Formula One Grand Prix, Mr Fernandes was speaking at an event here yesterday to launch AirAsia's loyalty programme, BIG. This allows frequent flyers to rack up points to redeem AirAsia flights or other services such as baggage.

The budget airline - which carried four million passengers last year - has 26 per cent market share in the low-cost carrier segment in Singapore.

Points can also be earned by spending with AirAsia's participating partners worldwide. As part of a tie-up with the low-cost carrier, customers of local bank DBS and telco StarHub will be able to convert their rewards points to BIG points.

For instance, 670 DBS rewards points or $750 worth of spend at StarHub will work out to 2,000 BIG points, which can be used to redeem a one-way AirAsia flight to Kuala Lumpur.

DBS, which has 4.5 million customers, said that over 50 per cent of DBS rewards points that were redeemed this year were exchanged for air miles.

Mr Fernandes said the frequent flyer programme could drum up incremental revenue of $10 million to $15 million over the next two years for the group as a whole.

The BIG programme was first launched in Malaysia in November 2011, before being extended to Indonesia and Thailand.

The loyalty programme, which is complimentary, has some 700,000 members globally, though Mr Fernandes is targeting one million members, with upcoming plans to launch the programme in markets such as China, India and the Philippines.


Get The Business Times for more stories.