Video: AirAsia press conference

Indicating its intentions to fly abroad very soon, proposed airline AirAsia India today trashed the “bizarre” policy of allowing carriers to operate international flights only after five years of domestic operations.

Tony Fernandes said that the existing 'five years and 20 aircraft' rule before an Indian airline is allowed to go abroad does not make sense. "Probably Naresh (Goyal) or someone put it down."

“These are bizarre rules ... that you can’t fly abroad before five years and 20 aircraft (fleet). ... That rule makes no sense. It is a negative for the Indian airlines.

“I, as a one-plane airline in Malaysia, can fly to India.

India is the only country which has such a rule,” Fernandes said here.

Maintaining that the Indian airline industry has “not done a good job” to explain to the Government the importance of aviation for the economy, he said “it is a shame that India has lost many years. See what new airlines in the region have done. India has lost because of vested interests even though it has a lot of talent and economic activities.”

Asked to elaborate what he meant by “vested interests”, Fernandes said “too many people have vested interests as they don’t think what India as a country needs. There is 100 per cent FDI in telecom. The Government should tell the people that aviation is good for the people.”

“Most of these negativities come from within the industry and ultimately fails the people. ... It is an incredibly self-interested industry,” he said.

The AirAsia chief said airfares would be the most important factor.

Speaking on AirAsia India which is being backed by his carrier, the Tata Group and Telestra Tradeplace of Arun Bhatia, he said it would offer cheap tickets by charging for various services including food and preferred seats, besides taking “aggressive” cost-cutting measures.

“There is no such thing as free. There is no free food.

If you want a nicer seat, pay for it. We will offer the lowest denominator cost by unbundling the fare,” he said. AirAsia India's menu will include fresh bread and hot food like biryani.

But AirAsia India would offer 15 kgs of free baggage allowance with each ticket, as per rules here. “(European low-cost carrier) Ryan Air charges for washrooms. We won’t do that but we will give you options,” he said.

Addressing the press conference with Fernandes, Mitu Chandilya, CEO, AirAsia India, today said he was bullish on India's aviation sector. Hoping that AirAsia India would one day be bigger than the AirAsia Group, Chandilya said: "There is a huge opportunity... can understand the costs and other issues."

According to Fernandes, Air India should be in the hands of the Government. He said it was a great airline when he was young. However, he added that he was not interested in picking up a stake in Air India. The Tata Group, Tony Fernandes' partner in AirAsia India airline, had earlier tied up with Singapore Airlines to bid for Air India.

Deccan Airlines went down as it did not have balance sheet and people priced it out of the market, Fernandes said. According to Tony Fernandes, "Vijay Mallya and Naresh said we have cash... let's make him lose cash."

Insurance foray

Meanwhile, AirAsia is also looking to enter India's insurance market through Tune Money. Stating this at a press conference today, the airline's CEO said this venture will be separate from the airline business.

(This article was published on July 3, 2013)
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