AirAsia India plans to start flying by the end of this year with a fleet of three-four planes. Photo: Reuters
Updated: Wed, Apr 24 2013. 11 19 PM IST
New Delhi: AirAsia India, the proposed budget airline of the Tata
group and
AirAsia Bhd
, may submit its business plan to
the civil aviation ministry this week as part of the process of applying
for a licence to start operations, according to two people with
knowledge of the matter who declined to be named.
Malaysia-based AirAsia plans to hold a 49% stake in the joint venture, Tata Sons Ltd 30% and Arun Bhatia of Telestra Tradeplace Pvt. Ltd the remaining 21%.
The
Foreign Investment Promotion Board approved the AirAsia proposal on 6
March. The next step is the preparation of the business plan and seeking
a no-objection certificate for an airline licence from the civil
aviation ministry. After this the plan needs the approval of the
Directorate General of Civil Aviation (DGCA).
“The
airline has made some enquiries at the aviation ministry and it may
submit its request within this week,” said one of the persons cited
above.
The proposal may be submitted as early as Thursday, the second person said.
The AirAsia spokesperson didn’t offer any immediate comment on the matter.
The
application to the civil aviation ministry for the no-objection
certificate has to include the names of board members as they need to be
vetted by the home ministry and intelligence agencies. The airline also
has to provide a justification for the routes that it plans to fly.
According to the registrar of companies, the board members of the
Mumbai-registered company include Anthony Francis Fernandes (Air Asia CEO Tony Fernandes), Venkataramanan Ramachandran, Bharat Damodar Vasani of the Tata group and Telestra’s Arun Kumar Bhatia. The proposal may also include the name of the CEO.
It’s not clear whether former Tata Sons Ltd chairman Ratan Tata will be part of the board.
“The
board of Airasia India has approved and appointed a CEO for AirAsia
India. He will be a revelation. Thrilled to have him on board,”
Fernandes had tweeted on Sunday, indicating the AirAsia India’s first
formal board meeting had been held.
AirAsia
India plans to start flying by the end of this year with a fleet of
three-four planes and an initial total investment of about $30 million.
It will operate from Chennai and focus on providing domestic
connectivity to small cities, the Malaysian airline has said. Officials
of the airline, which has said it will make Chennai its hub, have
inquired with the Airports Authority of India about space and other and
facilities at airports in the Tamil Nadu capital and Kolkata.
AirAsia
has also conducted interviews for cabin crew and is now in the process
of conducting interviews for pilots. Those seeking to join as commanders
need at least 5,000 hours of the relevant experience, according to one
pilot with knowledge of the process who didn’t want to be named.
The
airline is offering an 8-10% salary increase to pilots joining as
commanders but won’t provide transport to and from the airport or meals,
said this person, as part of its strategy of keeping costs as low as
possible. That may discourage experienced pilots from joining, this
person said, as all Indian airlines provide transport and meals to the
crew.
Still, the airline may be able to pick up applicants from among hundreds of pilots belonging to Kingfisher Airlines Ltd,
which has been grounded since October last year and has been erratic
with salary payments. Kingfisher’s fleet was dominated by Airbus A320s, which is what AirAsia also uses.
Besides Malaysia, AirAsia has ventures in the Philippines, Japan, Thailand and Indonesia. AirAsia, according to Bloomberg, has ordered 100 Airbus SAS A320s in December valued at $9.4 billion, in addition to the 200 it agreed to purchase in 2011.
RAJAT SINGH
PGDM 2nd sem.
iimt
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