New Pilots

AirAsia India to Expand to 20 Aircraft

2016 08 21

Budget airline AirAsia India, owned jointly by Tata Sons and Malaysia's AirAsia Bhd, is expanding its fleet to 20 aircraft, which would allow it to fly abroad. It board of directors approved new funding into the airline this month.

"We are at seven aircraft and want to get to 20 at the earliest. We are not going to stop at 20," said Amar Abrol, chief executive officer at AirAsia India, on Wednesday. "The board has approved multiple millions of dollars for this growth."

Air Asia will induct its seventh aircraft by September, expecting to serve more routes connecting Bengaluru, its base, to Hyderabad, Goa and Guwahati. The company, said Abrol, was showing gross profit since April, due to higher passenger loads on its routes.

In June, the government liberalised a decades-old policy that had restricted an airline from plying on routes out of the country till they'd completed at least five years and had a fleet of 20 aircraft.

Now, the only condition airlines such as AirAsia India is to operate a fleet of 20 planes that will allow them to fly on lucrative overseas routes, where they gain benefit of lower fuel and foreign exchange gains.

AirAsia India has seen turbulent times since it started service in 2014. It had to fight larger rivals such as Indigo in many routes, while restricting growth plans due to over regulations in the Indian civil aviation sector. The company saw its chief executive Mitu Chandilya quit earlier this year.

In March, Tata Sons bought over the 9.94 percent stake of Arun Bhatia's Telestra Tradeplace Pvt Ltd to wrest majority control in the budget airline it started two years ago with AirAsia, owned by airline tycoon Tony Fernandes.

At the same time, it brought in Abrol, a former American Express executive who was heading TPaay Asia, a mobile wallet owned by Air Asia in Malaysia, to run the fledgling airline.

Abrol says AirAsia India has secured " multiple millions of dollars" in fresh investment in the airline that could help expand fleet and run services into newer towns across India.

"Our model is to create opportunity in routes that never existed," says Abrol, adding that "only 70 million of India's 330 million fly and there is opportunity for everyone".

AirAsia India runs the modern Airbus 320neo, which offers fuel efficiency and says that there are 330 city pairs that the aircraft can fly, offering it enough head room for growth.

The airline has carried over 3 million passengers and owns a 2.2 percent marketshare against rivals such as Spicejet, Go Air and Indigo in the budget carrier segment. The company says that it generates 10-12 percent of ticket bookings through its promotional offers for routes across India.