AirAsia India Aims at Launching International Routes Next Year

AirAsia India is on track to launch its international routes as soon as it gets 20 aircraft in the country in the second half of 2018. The move will put AirAsia in the league of Indian carriers such as Jet Airways, IndiGo and Air India, that fly on international routes.

“We are on target to launch our international routes the minute we achieve 20 aircraft in India next year. We foresee our Indian operations to be very profitable once we start flying regional routes and connecting them to our wide network,” CEO Tony Fernandes said in a statement on Nov. 29. AirAsia India is a joint venture between AirAsia Berhad of Malaysia, owned by Fernandes, who is a Malaysian of Indian origin, and Tata Sons Limited.

The airline, which started its India operations in June 2014, has a domestic market share of 4 per cent with its fleet of 13 Airbus A320 aircraft. It competes with budget airlines like IndiGo and SpiceJet in the country.

Meanwhile, Jet Airways on Nov. 29 announced a partnership with Air France-KLM to increase their presence in Europe and to extend their connectivity to the United States.

Jet and SpiceJet are also planning to bid for national carrier Air India should the Union government float a disinvestment plan, according to the Times of India. Getting Air India, which has a 14 per cent domestic and 17-18 per cent international market share, would result in a paradigm shift for the buyer. IndiGo, Vistara and AirAsia India have been reported to have shown interest as well.

AirAsia India’s net loss narrowed by 74 per cent to Rs 16.40 crore in the September quarter from the year ago period, Fernandes added. “Our associate airline in India has grown tremendously, achieving 99 per cent year-on-year growth on passengers carried and a remarkable 104 per cent year-on-year growth in capacity this quarter,” the statement added.

AirAsia India would have 14 aircraft by the end of 2017 and it aims to increase the fleet size to 21 aircraft by the end of 2018. AirAsia India saw a loss of Rs 62 crore in the same period last year, but the revenue increased by 126 per cent year-on-year in 2017.

Factors like lower fuel prices and flying more passengers helped in the reduced losses of the airline. While the company posted a net loss of Rs 140 crore for the 2017 fiscal year, which was 23 per cent less than 2016 fiscal year, the losses were almost Rs 182 crore in 2016 fiscal year. Revenue of the airline rose nearly by 45 per cent to Rs 952 crore.

SpiceJet, meanwhile, saw a 79 per cent increase in net profit to Rs 105.3 crore in the September quarter from Rs 58.9 crore in the year earlier.

The profits of IndiGo’s parent company InterGlobe Aviation Ltd, on the other hand, almost quadrupled to Rs 551.55 crore in the September quarter.

Domestic air traffic in India this year has grown at about 15 per cent while international traffic growth is at 8-10 per cent, as per the Directorate General of Civil Aviation.  The International Air Transport Association has projected India to become the world’s fifth largest aviation market in 2025.