There are no true low-cost airlines in India, says AirAsia CEO Tony Fernandez

AirAsia's Group CEO Tony Fernandez is on a mission to India to sensitise and educate Indian policymakers about the airline's low-cost model and ways to stimulate the Indian aviation sector. But India has a fair share of low-cost airlines. Ask him this and he vehemently disagrees. "There are no true low cost airlines in India," he says. Air Deccan came closest to having the right model. It got its pricing right but failed in having the right cost structure. "The aviation sector in India has not changed over the years. It has either remained stagnant or slid backwards. Look at how vibrant Indian economy is but the aviation sector has not grown," he points out. He plans to share AirAsia's experience with the various state governments to stimulate the market in India.

Speaking to the media in Chennai about the status of AirAsia-Tata joint venture's operations, Fernandez said that the approvals have reached the 'no objection certificate' stage. He said that NOC is imminent. While he refused to speculate as to when exactly he hopes to commence AirAsia India's operation but he did indicate that he hopes to start flying by end of the year. He said the earlier deadline of September looks a bit ambitious now.

AirAsia, he further explained, would start service with three aircraft and the plan is to add one aircraft every month. "We are in the process of understanding the Indian market and we will offer lowest fare and simplest products," he said, adding that its initial focus will be to launch new routes.

On profitability, he said that AirAsia expects fierce competitive response from Indian players such as IndiGo, SpiceJet and others. "We took two years to break even in Thailand, three years in Indonesia and one year in Philippines. We hope to turn profitable in little longer than a year in India," he said. AirAsia is investing $20 million for the Indian operations.

Responding to a query on why he chose Chennai as the base, Fernandez said that AirAsia already flies to Chennai and there are strong links between South East Asia and south India. Also, everyone is focused on Delhi and Mumbai. "We like to do things no one has done before. We will go step by step and slowly paint India red," he added.

When asked about the common interest he shares with Vijay Mallya - be it airlines or Formula 1 -  Fernandez was quick to point out, " Vijay runs a better F1 team and I run a better airline."