A poor sales network was one of the factors behind Air Asia's limited success to India but that is set to change now. Air Asia is expanding its distribution network increasing its offline travel trade partners. The company has already tied up with online portals including MakemyTrip.com and Yatra.com.
On Thursday Air Asia's chief executive officer Tony Fernandes said the airline will start operations in India from Chennai with 3-4 Airbus A320 planes by last quarter of 2013.
The airline will serve tier II-III cities and skip high cost airports like Mumbai. The airline had to withdraw flights from Mumbai and Delhi last year citing high aeronautical charges and poor loads especially on its Malaysia-India flights.
Currently Air Asia flies into six cities in India from Bangkok and Kuala Lumpur. Its distribution network is limited and sells tickets through its own website, select 20-25 travel agents across country and online portal Expedia with which it has a joint venture arrangement.
"Air Asia has become aggressive in its distribution and is signing up more trade partners across India,'' said an aviation source. A few months ago the airline hired Devinder Singh Bindra, marketing manager in rival Malaysian Airlines, to head its sales in India.
Unlike full service airlines Air Asia does not use global distribution systems to sell tickets. It does not pay regular commission to agents. As an incentive it allows agents to sell tickets at a higher price than purchase cost fixed between them, the source added.
Sharat Dhall, chief operating officer of Yatra.com said the airline is integrating its booking system with them and very soon passengers will be able to book tickets on their site.
"It is evident that if Air Asia has to succeed in India and achieve scale like SpiceJet or IndiGo it will have to expand its distribution. It has tied up with us and is looking for other partners too," said Keyur Joshi, chief commercial officer of MakemyTrip. Also the distribution costs in India are falling with agency commissions coming down to one percent, he said.
"Paramount Airways had begun operations with select distribution network comprising few agents but that did not yield results," Joshi said.