"Welcome development. Long overdue. Will lead to enhanced competition, new routes and lower tariffs. The full impact will be seen in the winter of 2013, says Amber Dubey, partner and India head of aerospace and defence at global consultancy KPMG."
New Delhi, May 8 - A day after it was granted an air operator permit - by the safety regulator, AirAsia India said Thursday it soon expects to come out with its first line-up of domestic routes.

Our priority will be to enable as many Indians as possible to travel by air, emphasizing on a focused and disciplined cost structure and most definitely keeping our fares low as well, a statement quoted chief executive Mittu Chandilya as saying.

The tripartite joint venture - passenger carrier, modelled as a low cost carrier -, was granted the operational permit by the Directorate General of Civil Aviation - Wednesday evening.

In another statement, airline Group Chief Executive Tony Fernandes said: Our 12-year battle continues to make flying affordable against airport monopolies and incumbent airlines that have not been efficient. India will be a huge addition in realizing our promise of 'now everyone can fly'.

The new airline had received a no objection certificate - from the civil aviation ministry last September.

In April, the Commerce Ministry had given the nod for the foreign capital inflow by AirAsia Berhad, which will enable it to hold 49 percent stake in the JV.

The airline JV is between industrial conglomerate Tata Sons, AirAsia Berhad and Arun Bhatia-promoted Telestra Tradeplace.

Tata Sons will hold a 30 percent stake in the JV and Telestra Tradeplace 21 percent. The initial investment approved for the airline stands at Rs.80.98 crore.

Currently, there are six scheduled domestic airlines in the country - Air India, Jet Airways, JetLite, SpiceJet, IndiGo and GoAir. The operating licence of Kingfisher Airlines was suspended in 2012.

However, a public interest litigation in courts and a plea against the license with the Election Commission by BJP leader Subramanian Swamy may still put a spanner in AirAsia's scheme of things.

Even the DGCA's Chief Prabhat Kumar said the matter is still not final as the validity of the AOP is subject to the decision of the Delhi High Court.

The airline also has to get its operations schedule approved by the DGCA before it can start selling tickets.

However, aviation industry experts welcomed the long-awaited move.

Welcome development. Long overdue. Will lead to enhanced competition, new routes and lower tariffs. The full impact will be seen in the winter of 2013, says Amber Dubey, partner and India head of aerospace and defence at global consultancy KPMG.

The government needs to review the process of granting permits to global airlines. The FIPB had cleared AirAsia's proposal in April last year. The process should ideally be reduced to 3-4 month,Dubey added.


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