AirAsia takes off, eyes non-trunk routes

Bangalore: As its brand new A320 took off from Kempegowda International Airport in Bangalore and headed to Goa, AirAsia India became the country’s latest domestic airline. With its maiden flight, AirAsia India became the country’s fourth low-cost carrier, after IndiGo, SpiceJet and GoAir.
CEO Mittu Chandilya told newspersons that Bangalore would be the airline’s operational hub while Chennai will remain the corporate and maintenance base.
Chandilya noted that the high tax rate of 29 per cent on aviation turbine fuel levied by the Karnataka Government is a deterrent and the airline has requested the State Government to reduce it.
AirAsia will operate its next flight on June 19, from Bangalore to Chennai. Two more new A320s will join the fleet in a month or two. The budget carrier plans to add an aircraft a month to its fleet over the next 10 months.
Focus on tier-2 cities
It will add nine new destinations in the next few months, mostly in the south, including Mangalore, Hubli and Jaipur, where A320s can land. During the next three years, the airline plans to expand the network to 30 cities.
“Our focus will be on tier-2 cities and we are not keen on ‘trunk’ routes (to Mumbai, Delhi or Kolkata),” Chandilya said.
He said the airline sold all 180 seats within minutes of opening bookings on May 30. As a promotional offer, the airline sold 40 per cent of the tickets at Rs. 990, 10 per cent at Rs. 5 per ticket and the balance for up to Rs. 1,900 a ticket.
The 300-staff airline has shifted its pilots, crew and office to Bangalore. “Over the years we will invest and develop our hub here. Bangalore’s airport is excellent. I am interested in being here. I have moved the entire team here and am putting in contracts that are very Bangalore-centric.”
The Indian venture of the Malaysian airline has an initial investment of Rs. 90-crore ($15-million) from Air Asia Berhad (49 per cent); Tata Sons (30 per cent); and Telstra Tradeplace (21 per cent); it will go up to $20 million (around Rs. 120 crore), the CEO said.
Eyeing quick break-even
On recovering the investment, he said: “We will break even in four months… Our fares will be 35 per cent lower than the market rat. At this rate, we believe we can sustain and be profitable.”
AirAsia’s Indian venture was approved in February 2013. The carrier got its first plane in March this year and its operating licence in May.