AirAsia India to spread wings wide by end of first year

To import 10 Airbus A320s and account for 7% of total domestic LCC fleet

Low-cost carrier (LCC) AirAsia India, which is expected to launch its domestic services in partnership with the Tatas in February next year, has secured permission to import 10 Airbus A320 aircraft in the first year of its operations — about seven per cent of the country’s total LCC capacity. This will make the Malaysian carrier’s first-year fleet bigger than those of most others in the segment.

Air Asia’s capacity share is based on the premise that other competing airlines would use their entire new capacity in the domestic skies, though that is highly unlikely.

At present, IndiGo, the largest Indian LCC, has a capacity to ferry 60,000 passengers a day. It is expected to add 12 aircraft next year to increase its overall capacity to 73,000 seats a day. Compared with this, according to aviation experts, Air Asia should be able to fly 11,000 passengers a day by the end of its first year. On an average, a single plane is used for six domestic flights a day. The number of flights depends on route distance.

A closer rival to AirAsia would be Go Air, which is expected to have an average seat capacity of 18,000 a day after it has inducted three aircraft over the next twelve months.

SpiceJet, too, is likely to add three more planes to fleet next year. Taking these aircraft into account, AirAsia’s capacity after a year would a fourth of SpiceJet’s. Kapil Kaul, CEO for South Asia at the Centre for Asia Pacific Aviation (Capa) said: “I expect AirAsia to have more aggressive expansion. The full impact of its operations will be visible from 2015, but much of that depends on when it receives clearance from DGCA (The Directorate General of Civil Aviation) and when it launches operations.”

At present, the total number of seats offered by IndiGo, GoAir, SpiceJet and JetKonnect stands at 127,000 a day. These four airlines will collectively add 18 to 20 aircraft to their fleet over the next twelve months. According to analysts, the number of daily seats could rise by 15,000 to 20,000 after capacity augmentation during the period. But, all the new planes brought by the airlines may not be for the domestic routes.

AirAsia India is a joint venture among AirAsia Berhad (49 per cent), the Tata group (30 per cent) and Telestra Tradeplace (20 per cent). The airline had received a clearance from the Foreign Investment Promotion Board in March and a no-objection clearance from the civil aviation ministry in September. But it can file its schedule and secure slots only after it has received DGCA approval.

Earlier this year AirAsia India had announced it would launch services with three-four Airbus A320 aircraft, with a hub in Chennai. It also said South India would be its focus market and it would skip “high cost” airports, including the Mumbai and Delhi ones. Last year, the Malaysian airline had withdrawn its Kuala Lumpur-Delhi and Kuala Lumpur-Mumbai flights, citing high costs.