Tata Group, the pioneer of commercial air travel in India, is set to re-enter the country's aviation sector in partnership with Malaysia's AirAsia, Asia's biggest budget carrier, and Telestra Tradeplace.
"Now everyone can fly". Malaysian low-cost carrier (LCC) AirAsia makes this bold proclamation on each of its aircraft and the airline's JV in India could well signify the same for flyers here.
As India has seen huge upswings and downswings in airlines' fortunes over past few years, what the industry needed was a well-funded group — like the Tatas — tying up with a professional airline to run a stable low-cost-cum-low-fare business that isn't uncertain of its survival.
"It's a marriage of two great brands. The consumer will have more options and get more competitive prices. AirAsia is known for its very innovative marketing strategies," said a travel consultant.
AirAsia sources confirmed this and hinted at what India could expect from it. "We stimulate the market by low fares. Our policy is very simple: Passengers should book as early as possible and get the lowest fares. We open our flights one year in advance and the focus is on discretionary, leisure travellers who can plan their travel well in advance. We have followed this policy in many countries like Indonesia, Philippines and Thailand and hope to do so here too," said a source.
In fact, Indian LCCs are hoping that the coming together of such strong names like Tata-AirAsia will help reduce government interference in their operational decisions. AirAsia offers attractive prices by having a low fare that will take passengers from their origin to the destination. But for everything else, they have a separate charge. It does not allow any free check-in baggage on its international flights and passengers have to pre-book the same.
"We introduced a charge of pre-selection of seats that was stopped by the directorate general of civil aviation. Now there is talk of the aviation ministry trying to decide the upper and lower fares airlines can charge on any route. The ministry is treating airlines like delinquent juveniles who can't see what's good for them and so it is taking decisions like how many aircraft should a carrier have or should someone start a new airline or not. Once global biggies are here with solid Indian partners, the aviation authorities' interference should hopefully reduce," said an airline official.
The country could experience what best LCCs globally like RyanAir, SouthWest, EasyJet and Air Asia offer: Really low cost of just flying from point A to point B but all other services being unbundled and sold separately
Industry insiders expect AirAsia India to take off in about a year — after getting clearances and flying licence. By that time, they expect the Jet-Etihad deal to have been sealed and both SpiceJet and GoAir would have got foreign airlines with deep pockets as partners. IndiGo is well-funded and Air India is supposed to keep getting equity from the government. A couple of more JV start-ups and AirAsia India could then be just what India needs for its domestic air travel requirement.
"The government must do away with the five-year, 20 aircraft rule for an Indian airline to fly abroad. Removing this cap will catalyze the process of India getting start-ups," said an industry insider.