By Rhik Kundu
Air Asia India has finally got the Air Operator Permit (AOP), which was required by the airline to start its operations in the country, after nearly a six month wait.
This is subject to a July 11 decision of Delhi High Court, when it will hear a plea from Bharatiya Janata Party’s Subramanian Swamy and Federation of indian Airlines (FIA) against granting operational status to the airline.
The Chief Executive of the airline, Mittu Chandilya, on Wednesday tweeted saying , “Boom! 1815Hrs (IST) today AirAsiaIndia was born.So proud of my team.Who is ready to revolutionize Air Travel in India.”
The airline is expected to start its operations by July. A senior Air Asia India official had recently told FE that the airline would start its operations by July, provided it got the AOP by May.
The road to start its operations in India had been marred by delay and litigation for the airline, which had earlier aimed at starting commercial operations by the January-March 2014.
This was delayed to March-May period after Directorate General of Civil Aviation (DGCA) called for public objections to the launch of the airline on January 20. The airline had earlier obtained approval from the Foreign Investment Promotion Board (FIPB) on April 2013, which cleared the $30-million deal to launch Air Asia India. The Civil Aviation Ministry gave a no-objection certificate (NOC) to the airline during September last year.
“There is already an over capacity in the industry. We have seen drastic price wars and airlines’ with bleeding balance sheets. With Air Asia India becoming operational this is likely to continue,” said Deep Narayan Mukherjee , Senior Director at India Ratings & Research – A Fitch Group Company
The last leg of regulatory formalities with officials of the DGCA onboard the airline’s first Airbus A320, was completed on May 1.
The airline also got a breather from the Supreme Court in May, when the apex court refused to pass any interim order on a plea by Bharatiya Janata Party’s Subramanian Swamy seeking to restrain approvals to operationalize the AirAsia India deal.
DGCA has granted the airline in-principle approval to import 10 Airbus A-320-200 aircraft in December last year.
Industry experts say that the arrival of Air Asia India is a good news for the fliers, as the fares are expected to drop further with possibilities of intense price wars continuing to loom in future. However, the balance sheet of the airlines are expected to be weak, as a result of the competition, in the next couple of quarters Air Asia India, which received its first aircraft Airbus A320 in Chennai on March 22, ‘plans to start its operations with four aircrafts’, a senior official with the airline told FE. The airline’s fleet will consist entirely of Airbus 320 aircraft.
In a statement in March 22, while unveiling its first aircraft, it said that the aircraft (A 320) is configured in an all economy layout with 180 seats and powered by CFM engines.
AirAsia India’s fleet will be drawn from the 475 planes order of Aibrus A320 family aircraft ordered by the AirAsia Group, the airline has said in a staement in March.
“Our CEO @MittuChandilya with Air Operators permit.What a battle that was. proud day for me and all airasia all stars,” tweeted Tony Fernandes on Wednesday.
Air Asia India is a joint venture between Air Asia Bhd, which holds 49% stake, Tata Sons Ltd, which holds 30% and Arun Bhatia of Telestra Tradeplace Pvt. Ltd, which holds 21% stake in the airline.