Ajit Singh assures AirAsia won't have to wait long

Given all regulatory nods come through, the airline is expecting to start operations by the end of this year

Chairman Emeritus, Tata Group, Ratan Tata and AirAsia Chief Tony Fernandes on Tuesday met Civil Aviation Minister Ajit Singh and apprised him of the latest appointments and other developments in the proposed airline.

“We came to apprise the minister about the developments that have taken place (since the Foreign Investment Promotion Board cleared the proposal) and our visit to Chennai (headquarters of the proposed airline),” said Fernandes. He was accompanied by AirAsia India chief executive officer Mittu Chandilya and chief advisor Ratan Tata.

Singh said the group had applied to the civil aviation ministry for a No-Objection Certificate (NOC) and submitted names of all top new appointees for security clearance to the Union home ministry, as per regulations. “When they get security clearance, they will apply to the Directorate General of Civil Aviation (DGCA) for a flying permit. I don’t expect it will take too long,” Singh said.

Given all regulatory approvals come through, the airline is expecting to start operations by the end of this year.

While the headquarters of the airline would be based in Chennai, the operational bases could be at Chennai, Bangalore or Kochi. Air Asia would focus on reducing fares by scaling up volumes to sustain operations.

‘Nano’ fares
Fernandes said to keep costs low, Air Asia would not fly to high-cost airports such as Delhi and Mumbai. “Almost 50 per cent of the air travel market is between Delhi and Mumbai. We will try to rebalance that so India has a more equal distribution of air traffic. We will offer ‘Nano’ fares even if aviation turbine fuel prices rise to Rs 70,000 a kilo litre,” he said.

Earlier this year, the FIPB cleared a proposal for the setting up of a new airline, AirAsia India, by Malaysian carrier, AirAsia. AirAsia India is a three-way joint venture partnership (49:30:21) with the Tata Group and Arun Bhatia of Telestra TradePlace.

“This is a different type of enterprise which Fernandes is bringing. Hopefully, it will spread air travel across India and give a new dimension (to the aviation sector). The Tata Group is pleased to be associated with it,” said Tata.

Tata, Fernandes and Chandilya later met Commerce and Industry Minister Anand Sharma and briefed him about the progress made in their proposed airline venture. Fernandes said he had a “very good meeting” last week with Tamil Nadu Chief Minister J Jayalalithaa, and with the officials of the Airports Authority of India.

The meeting with Singh came after the civil aviation ministry sent the names of AirAsia India’s board members and other key officials to the home ministry for security clearance. Once security clearance is granted, the Aviation Ministry would give the NOC to enable the airline to apply to the DGCA to get the Scheduled Operator’s Permit.