Air Asia Will Popularise Air Travel in South India

ramkey By ramkey, 13th Oct 2013 | Follow this author | RSS Feed | Short URL
Posted in Wikinut>Money>Travel & Transport

One interesting thing about the airlines is that it is not going to allow free check-in of baggage. Other airlines are carefully scrutinising this model to improve their profits. Once the Indian operations of Air Asia start, it will benefit all. In addition to AAI, taxi services and hotels will also be benefitted in South India and especially at Chennai. Air Asia is already in joint venture with IL&FS group’s Apodis to open more than twenty hotels.

Rs.522 Airfare

Air Asia has gone on a big promotional binge. Seats were available for booking in the airline online from July 14. The airline has offered twenty lakhs promotional seats from Kuala Lumpur to many destinations. The fare starts from a low Rs.522. One way fare from Kolkata/Chennai to Bangkok is Rs.3300 in the airlines. Rs.522 fare is for travel to domestic destinations in Malaysia from Kuala Lumpur which includes Langkawi, Alor Setar, Kota Bharu, Penang, Kuching and more places. The fare has been fixed at Rs.1042 for travel from Kuala Lumpur to other places like Hatyai, Singapore, Surat Thani, Krabi, Bangkok, Phnom Penh, Siem Riep, Bandung and other places.

World’s Best Low Cost Carrier

Air Asia has been named as the world’s best low-cost carrier consecutively for the fifth time. The honour was conferred by Skytrax. Air ticket from Kuala Lumpur to Saudi Arabia costs Rs.11397. Air Asia executive in India Tony Fernandes has criticised the Indian government for imposing a rule of not allowing domestic airlines companies to fly abroad till they complete five years of successful operations and possess twenty aircraft in their fleet. The executive also demanded the Indian government to construct a low cost airport at Delhi and Mumbai. This is a good suggestion and the government of India should earnestly consider it for the welfare of airlines companies which are languishing.

South India Is At the Centre of Many Important Destinations

Fernandes’ argument is not without reason. South India is in the centre of Gulf/Africa/South East Asia. Passengers can be flown from Kuala Lumpur to South India and from there they can be transported to their destinations to Gulf or Africa by a new airline. This will avoid very long flights at a stretch and hence benefit a low cost airline like Air Asia. Air Asia group is also planning for a foray into insurance field in India through “Tune Money”. But insurance has no connection with airlines and the company should tread on caution.

Greasing the Palm of Government Officials Is the Big Hurdle

The attraction of the Air Asia is its tie-up with the Tatas in India. Tatas are the pioneers in aviation industry and they started it in British India even before independence. If the airline succeeds, it will spread air travel in India. In USA, the airfare and rail fare are the same for many domestic destinations. This has encouraged air travel in USA. In India, rail fares are much cheaper than air fares though the cost of AC First Class seat in railways for some destinations is at par with air fare. But will the government of India allow the airlines to start its operations without extracting its pound of flesh? In India, everything is governed by corruption. If the Air Asia executives are unable to grease the palm of the Indian politicians and officials in the Civil Aviation department, the airline is unlikely to start and even if it starts may be facing hitches. Then there are competitors like Spicejet who are jealous about Tatas. They may influence the government officials to block the operations of Air Asia.

Air Asia Is Not Indian Bank

Cost management may also pose tough challenges for Air Asia. Limited infrastructure and expensive fuel may have its bearing on the airlines’ profits. When the rest of the Indian airlines companies have failed to deliver, how can Air Asia be an isolated tower in the island? If Indian Bank fails repeatedly, the government will offer a prop up by infusing capital into the bank. This is because the Indian Bank executives have political clout with both the Central and State governments. When the Indian Bank CMD visits RBI, the RBI Governor gets up and salutes him. Does Air Asia have that kind of clout with the government? Certainly the answer is a firm no.

Can Ramadorai Emulate His Success In The IT Field?

But Air Asia has one advantage. It is a South-focused and it may prove to be profitable to it in the long run. Another advantage is that S Ramadorai has been named as the Chairman of Air Asia India. Ramadorai successfully steered Tata Consultancy to success over its rivals Infosys and Wipro from 1996 to 2009. But again, can his success in the IT field be repeated in a totally different segment like airlines? Only time can answer. K V Kamath steered ICICI Bank to success and made it the largest private sector bank in India. But he could not emulate the same success in the IT field when he was appointed as the head of Infosys. But of course Kamath faced hurdles from the founder Chairman of Infosys Narayana Moorthy. For example Narayana Moorthy in his last meeting at Infosys expressed his dislike for acquisitions whereas Kamath’s success at ICICI Bank was because of his acquisitions strategy. Ratan Tata is the chief adviser to Air Asia and his valuable experience will lend a charm to the airlines.

DMK Government Returning To Power Is a Threat to Air Asia

Mittu Chandiliya has been appointed as the CEO of Air Asia India. Air Asia India is a joint venture among Tata Sons, Air Asia and Telestra. Air Asia India will have Chennai as its headquarters. This may pose a political problem for the company if the DMK returns to power in Tamil Nadu. Earlier when the DMK Minister Dayanidhi Maran at the Central government threatened Ratan Tata over some telecom deals. The same thing could repeat if Karunanidhi returns as the Chief Minister at the age of 92 in 2016.


Air Asia, Airlines Companies In India, Aviation Industry In India, Low-Cost Airlines Companies, Tata-Air Asia Venture, Tony Fernandes

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author avatar ramkey
I am running a coaching centre and teach Mathematics, Physics and Chemistry for students appearing in competitive examinations like IIT, SAT etc I am interested in journalism as a pastime.

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author avatar Lady Aiyanna
13th Oct 2013 (#)

Its a great airline, but needs to keep its timings. I loved my journey but disliked the excessive wait.

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author avatar M G Singh
14th Oct 2013 (#)

Interesting info. Never used Air Asia yet. How does it compare with Tiger air ?

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author avatar Retired
29th Dec 2013 (#)

Very interesting and informative post.

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author avatar ramkey
30th Dec 2013 (#)

Thank you Anuprita for your motivating comments.

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