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No frills air carrier AirAsia is upbeat on the growth prospects in India as it is on course to slice up over 10 per cent of the country's growing domestic passenger share within a couple of years, up from over 4.4 per cent.
Operating with a fleet of 17 aircraft, and mostly aiming at non-metro business, the airliner is planning to add about 10 aircraft a year to the fleet over the next 3-4 years.
Passenger volume
Amar Abrol, Managing Director and Chief Executive Officer of AirAsia, said the Indian market currently serves about 75 million passengers a year. This is projected to grow to over 330 million.
“Just take the case of the number of aircraft India has, which is about 800, as against over 3,000 in China. It shows the immense potential for aviation sector growth. In fact, even before there has been focus on regional connectivity, we began serving some virgin markets,” he said.
Abrol told BusinessLine , “In April 2016, we had six aircraft and this number is expected to go up to 18 in April and to 21 by the year-end. Our fleet addition has been quite rapid and we expect to add at least 8-10 aircraft a year over the next 3-4 years.”
International plans
“Significantly, we will also begin our international operation in the first quarter of 2019. The connectivity to overseas destinations will be based on business prospects rather than simply adding a new city. If domestic connectivity makes better sense, we will focus on it,” he said.
The airline saw the fourth quarter of 2017 as its first profitable phase. The focus is on connecting locations that makes business sense. While Udan has been adding to the regional connectivity, AirAsia has been doing this by looking at tier-II cities and virgin routes, he explained.
The airline, which expects to break even by the year-end, has last seen infusion of $51 million. The focus is on further consolidation in the domestic sector before taking up overseas routes.
“The aviation industry, which is witness to a growth of 20-22 per cent, offers enough room for all players to grow,” he said.
Current destinations
AirAsia has made Delhi, Bengaluru and Kolkata as three bases in India so far and currently fly to 19 cities, most of them tier II and III cities such as Ranchi, Nagpur, Bhopal and Imphal.
Abrol said, “The company expects to achieve double-digit growth over the next two-three years. And, as we start our overseas connections, most probably to South East Asia, new business will open up.”
“The overseas connectivity, mostly within 5-6 hours of flight, will make it easy for people going to Japan, Hawaii, Australia and other locations. The Europe, West Asia and beyond connectivity is very promising,” he said.
“We had decided to induct Airbus A320 planes to our fleet. Typically each plane accommodates about 180 passengers. We had opted for GE engines and we have not faced any issues,” he said.
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