We’re looking at opening more routes to India

“Believe the unbelievable. Dream the impossible. And never take ‘No’ for an answer.” With such a personal credo, Tony Fernandes, the Group Chief Executive Officer of AirAsia, may as well be an action hero. And in a sense, he is. His canvas is Asia and beyond, his media is the low-cost airline, and his dream is to make AirAsia the biggest foreign airline in India.

Will that happen, what with the Middle Eastern giants such as Emirates and the low-cost carrier Air Arabia, vigorously expanding in India, remains to be seen. But Tony Fernandes is not the one who is going to be relaxing in a hammock and drinking feni (or whatever similar drinks available in Malaysia). He has set his goals and knows how exactly to go about it.

In 2001, when the Malaysian Prime Minister, Mahathir Mohammed, made an offer to Fernandes not to start an airline from scratch but to buy the heavily bleeding AirAsia, a subsidiary of government-owned DRB-Hicom, for just 26 US cents (one ringgit), Fernandes going by his gut-feeling jumped into the fray. There has been no looking back for Fernandes and AirAsia. Adopting, which some of them call a “blue ocean strategy” of generating high growth and profits by creating new demand in an uncontested market space, he has within one year of takeover, got AirAsia soaring to new heights—achieving break-even and clearing all its debts.

In an interview with SP’s Air Buz, Fernandes spoke about AirAsia’s India plans.

SP’s Air Buz (SP’s): Nine flights into India—how has the response been? Will you be storming some more “unexplored” cities or will it be a cautious approach?

Tony Fernandes (Fernandes): We’ve made a good start. We’ve managed to get word out there about AirAsia connecting India to Southeast Asian Nations (ASEAN) and our other destinations beyond the region such as Australia, Japan, Korea and the UK. AirAsia operates short-haul flights to Bangalore, Chennai, Hyderabad, Kochi, Kolkata, Thiruchirappalli and Trivandrum. AirAsia X, our low-cost long-haul affiliate, operates long-haul flights to Mumbai and New Delhi.

We’re not opening a new Indian destination soon, but we have plans in place to connect the subcontinent to more of our existing destinations. We would love to open a Bangkok to India route.

SP’s: While all or most of the traffic is expected to be leisure, which is seasonal, how will Air Asia shore up revenues from these connections?

Fernandes: AirAsia enjoys a mix of leisure and business travellers. The seasonality of leisure travel does not affect us like it affects other airlines. Also, our constant offer of low fares coupled with premium services attracts travellers the year round.

SP’s: What is the 2010 target for India—number of destinations, number of passengers, market share, etc?

Fernandes: We’re not adding destinations to the nine we already have in India for the rest of this year, but we’re looking at opening more routes to India. We would love to connect more Malaysian cities and Bangkok to India. There is room for the opening up of new routes and for an increase of frequencies on existing routes.

We expect passenger volume to pick up, especially in the fourth quarter, which is traditionally our strongest.

It would be fantastic to have AirAsia become the biggest foreign airline in India. We’ve achieved this in Singapore, and it would be great to replicate this feat in India, home to over 1 billion people.

SP’s: You will be creating a market and I guess this is going to be the most difficult part of it. What challenges exist in creating an air travel market in India?

Fernandes: One of the challenges is propagating the concept of low-cost air travel in India. There is a need to get more information out there about how low-cost airlines operate and why we’re able to offer lower fares, for instance. In the case of AirAsia, we’d like the travelling public to know more about how extensive our network is—we have the most extensive network of destinations in ASEAN—that we have great flight frequencies, a very young fleet of Airbus aircraft and stringent flight safety standards.

There’s also the challenge of the rise in fuel prices. Although for now we are not overly worried because we have strong ancillary income to serve as a buffer against fuel price hike, still we hope that prices don’t shoot up.