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AAI-CHENNAI TOP 10 MKTS
AAI-ROUTE MAP - 2013-03
Formed in 2012 and to start operations in 2013. Proposed Malaysian-Indian low cost carrier (LCC), scheduled & charter, domestic, regional & international, passenger & cargo, jet airplane services.
Chennai, Tamil Nadu, India
INDIA (REPUBLIC OF INDIA) WAS ESTABLISHED IN 1947, IT COVERS AN AREA OF 3,287,590 SQ KM, ITS POPULATION IS 970 MILLION, ITS CAPITAL CITY IS NEW DELHI, AND ITS OFFICIAL LANGUAGES ARE HINDI AND ENGLISH.
October 2012: AirAsia (ASW) management stated that they were keen to have more presence in India if the aviation environment and tax structure were conducive and friendly for low-cost carrier (LCC) operations. With the Indian government allowing a foreign direct investment of up to 49%, AirAsia (ASW) Group Chairman, Tony Fernandez tweeted "Fantastic news that India has opened up investments to foreign airlines." He said that it was now easier for him to set up an airline in India. (ASW) wanted to take up a stake of 49% in the airline, which was the maximum allowed by the Indian government at that time. Tony Fernandes said that he had been closely observing the developments in India over the past few years and felt that it was the perfect time for him to set up an Indian version of his airline. (ASW) said that it was seeking government approval to establish a joint venture (JV) with two Indian companies, namely Tata Sons and and Amit Bhatia (owned by Telstra Tradeplace). Tata Sons would represent the airline with two non-Executive Directors in the airline's board. (ASW) planned to begin operations to Tier 2 and Tier 3 cities in India with Chennai International Airport as it's main base.
Soon after, AirAsia (ASW) announced that the shares of SpiceJet (ROJ), an airline that already had a major presence in Chennai, went down by over >-4.5%. Amber Dubey of (KPMG) India said that the introduction of (ASW) would cause another price war, which would ultimately lead to an increase in air traffic and some consolidation in the Indian aviation sector.
AirAsia (ASW) initially invested an amount of US$ 50 million in the new airline (AAI). (ASW) wanted to begin operations from Chennai and expand it's network in S India, to where (ASW) already operated flights from Malaysia. Tony Fernandes called the (JV) a "marriage made in heaven." He said that that the Tatas know India very well and have an excellent reputation. A tie-up with the company would help (ASW) to operate efficiently. Fernandes said that he would concentrate mainly on the 1 million south Indians who travel by rail.
In preparation for it's operations in India, (ASW) struck deals with online and offline travel agents throughout the country. Previously, limited distribution of sales had affected the airlines' performance in India and (ASW) wanted to avoid that with its Indian subsidiary by all means. (ASW) started selling its tickets through MakeMyTrip, Yatra.com and many other Indian travel websites.
February 2013: AirAsia (ASW) submitted an application to the Indian Foreign Investment Promotion Board, through its investment arm, AirAsia Investment Limited, to seek approval for commencing its operations in India.
AirAsia India (AAI) is a proposed Malaysian-Indian low cost carrier (LCC). It is a subsidiary of AirAsia (ASW), which is Asia's largest low-fare, no-frills airline and a pioneer of low-cost travel in Asia. AirAsia (ASW) announced its Indian low-cost subsidiary on February 19 2013. (AAI) is to be operated as a joint venture (JV) between Tata Sons and AirAsia (ASW), with (ASW) holding 49% of the airline. Lakshmi Mittal's son in law Amit Bhatia will take up 21% and Tata Sons will take up a stake of 30% in the airline. The (JV) would also mark Tata Sons' return to the aviation industry after 60 years. AirAsia (ASW) is also the 1st foreign airline to set up a subsidiary in India. (ASW) will operate with the world's lowest unit cost of 1.25/US$0.02/available seat km (ASK) and a passenger break-even load factor of 52% LF. It hedges 100% of it.
May 2013: AirAsia (ASW) may order an additional 50 A320 jets on top of its existing record order for 475, Group Chairman Tony Fernandes said. The additional airplanes would be mainly for the market in India, where it expects its new affiliate, AirAsia India (AAI) to launch in the 4th quarter.
"We've bought a lot of planes but we're still short. We're still leasing planes at the moment, so I was right buying these planes, and we may have to put in another order (50 or something like that)," Fernandes told "Reuters." Initial airplanes for AirAsia India (AAI) would come from the airline's existing order.
July 2013: AirAsia India (AAI) is exploring the possibility of shifting its operational base in India from Chennai to Kochi International as a means of exploiting the under-served Kerala market as well as providing a platform for planned future international operations. (AAI) is still awaiting Indian regulatory approval as well as a no-objection certificate from unions. With a launch date of November 1 on the cards, AirAsia India (AAI) says it will initially start its operations with 3 A320-200s with plans to add 1 plane every month. A large part of the airline’s strategy in India, according to AirAsia (ASW) boss Tony Fernandes, will rest on the ability of the Indian market to adapt to AirAsia (ASW)’s low-cost strategy. In addition, (ASW)'s Thai sister carrier, Thai AirAsia (THA) said it has applied to rights to serve Myanmar’s capital Naypyitaw from Bangkok Suvarnabhumi.
Air Asia (ASW) intends to reduce growth at its Malaysia unit this year, taking only 6 new A320s instead of the previous 10 planned, to the benefit of its Indonesian (AWR) and Thai (THA) subsidiaries. The start-up of AirAsia India (AAI), in partnership with Tata Sons (30%) and Arun Bhatia of Telestra Tradeplace (21%), previously anticipated for September is almost certainly postponed to 2014 because of regulatory hurdles.
Meanwhile, AirAsia X (ASX), previously the long haul and now having become the medium haul affiliate of (ASW), is hoping to raise $300 million with an Initial Public Offering (IPO) of 10.6% this month to retail investors. (ASX) plans to expand service in N Asia and Australia, as well as to establish a Thai hub using 2 A330-300s for flights to Japan and S Korea in partnership with Thai AirAsia (THA).
August 2013: AirAsia India (AAI) could miss its planned November 3 launch date owing to delays in its regulatory clearances. Mittu Chandilya (CEO) of (AAI), said the airline is awaiting its Certificate of No Objection (NOC) from the Indian Ministry of Home Affairs and the Ministry of Civil Aviation (MoCA), needed for it to acquire it Air Operators Certificate (AOC) from the Directorate General of Civil Aviation (DGCA). "I was hoping for it before Diwali, but I am not sure. We are waiting for the (NOC) clearance and it really depends on that. I will never launch this airline until we are absolutely ready commercially, as well as operationally, from a safety stand point."
September 2013: India’s Ministry of Civil Aviation has granted a no objection certificate (NOC) to AirAsia India (AAI), moving it a step closer to launch.
February 2014: India’s airline regulator has said it has no reason to deny AirAsia India (AAI) an air operator’s certificate (AOC). A committee that examined the criticism against the (AAI) launch has found the objections to be without merit. (AAI) is planned as a joint venture (JV) between AirAsia (ASW) and 2 Indian partners (the Tata group and Telstra Tradeplace). It is now likely to be granted permission to fly soon.
The Directorate General of Civil Aviation (DGCA) had received 18 objections saying (AAI) should not be allowed. Those objecting included the Federation of Indian Airlines and Inter-Globe Aviation Ltd, the holding company for India’s largest low-cost carrier (LCC), IndiGo (IGO).
AirAsia India (AAI)’s entry with ultra-low fares is likely to impact IndiGo (IGO)’s market share. The startup has already appointed a (CEO) and has been waiting to launch for over a year.
In a statement that is being seen as very progressive, the committee said there is strong need for facilitating air traffic in India by encouraging existing airlines as well as allowing new entrants. It said the new airline will also bring operational efficiency and expertise in the existing airlines. Stiff competition and improved work culture can only be provided by introduction of new entrants.
(AAI) had already cleared most of the other hurdles in 2013. In April last year, the Foreign Investment Promotion Board approved the $30 million deal to launch AirAsia India (AAI). The airline received a no objection certificate (NOC) from the Civil Aviation Ministry last year.
March 2014: AirAsia India (AAI) has received its 1st airplane, an Airbus A320, in the southern Indian city of Chennai. The 180Y-seat A320, drawn from the AirAsia Group’s order for 475-airplanes, is configured in an all-economy (Y) layout.
April 2014: Tata (SIA) Airlines (to be based at Delhi International airport) has secured its No-Objection Certificate (NOC) from the Indian Ministry of Civil Aviation (MoCA), one of the many steps required before it can actually launch operations.
The Tata Group and Singapore Airlines ((IATA) Code: SQ, based at Singapore Changi) joint venture (JV)'s next step will involve applying to the Directorate General of Civil Aviation (DGCA) for its Air Operators Permit (AOC). The Tata Group's other venture, AirAsia India (based at Chennai) (AAI), is currently undergoing this phase of its certification process.
May 2014: India’s newest low-cost carrier (LCC) AirAsia India (AAI) has received its (AOC) from the Director General of Civil Aviation (DGCA), clearing the way for launch. (AAI) has been conducting proving flights with an Airbus A320 airplane.
The launch is significant because it will be the 1st airline to start up with investment from a foreign carrier. It has taken >1 year for (AAI)’s promoters to get all the clearances. AirAsia (ASW) Founder Tony Fernandes tweeted, “History has been made today. Everything has been hard for (ASW) but we never give up. Today, AirAsia India (ASW) has received its approval.”
India’s government has been gradually liberalizing rules for the airline industry. The rules on foreign direct investment (FDI) in airlines were changed to enable loss-making Indian carriers to benefit from foreign funds. Among other ventures yet to get the regulator’s go-ahead is Singapore Airlines (SIA)'s plan to launch a full-service carrier with the Tata group.
Domestic carriers and other political activists had opposed AirAsia (ASW)’s investment, saying it was not in an existing airline but a brand new venture. The government and the (DGCA) examined the objections and found them to be baseless. However, the approval is subject to a final decision by the Delhi High Court, which is hearing a petition against the airline by political activist, Subramanian Swamy on July 11.
AirAsia India (AAI) is a joint venture between AirAsia Bhd (ASW), which has 49%, and 2 Indian companies (the Tata group, with 30% ownership, and Telestra Tradeplace, which holds the remaining 21%).
Based in Chennai in S India, (AAI) will focus on connecting tier 3 cities, mainly targeting a new segment of travelers who currently use roads and railways. Only 2% of India’s traveling public flies.
(ASW) Founder Tony Fernandes has been planning to enter the Indian market for several years. Lately, he has been tweeting about the imminent clearance for (AAI). AirAsia India (AAI)’s fleet of 10 Airbus A320s will all be drawn from the AirAsia Group. (ASW), now among the world’s most profitable, has 475 of the type on order.
June 2014: AirAsia India (AAI) has begun operations. On June 12th AirAsia (ASW)’s latest joint venture (JV) airline began daily flights from Bangalore (BLR) to Goa (GOI). Competition on the 480 km route comes from Go Air (GOZ) (daily flights), Jet Airways (JPL) (daily flights), SpiceJet (ROJ) (6x-weekly), IndiGo (IGO) (6x-weekly) and Air India (IND) (4x-weekly).
This route will be served daily and will be joined on June 19th by double-daily flights from Bangalore to Chennai, and on July 20th by daily flights to Kochi. Examining (AAI)’s schedule data reveals that AirAsia India (AAI), which originally announced that it would be based in Chennai, appears to have shifted its base of operations to Bangalore, as that is where (AAI)’s 1st airplane starts and ends the day. Bangalore is India’s 4th busiest airport with 12.87 million passengers in the year to March 2014, while Chennai ranks 3rd with 12.90 million passengers in the same period.
Competition on the 3 routes announced so far is intense, with 5 carriers already operating on the route to Goa (with a total of 30x- weekly departures), 6 carriers serving the Chennai market (operating a total of 113x-weekly departures), and 3 carriers serving the Kochi market (33x-weekly departures).
Given the short sectors involved, these 4x-daily flights can easily be flown with just a single airplane. With (AAI) planning a 05:55 departure from Bangalore to Chennai, and based on (AAI)’s schedule data, there is even time for a 5th daily rotation in the middle of the day. AirAsia India (AAI) apparently has 2 airplanes at present, so a maximum of 10 rotations per day could be achieved.
AirAsia (ASW)’s track record in the Indian market has been mixed so far. While (ASW) serves Bangalore (launched May 2010), Chennai (May 2010), Kochi (November 2009), Kolkata (November 2009), and Tiruchirapalli (December 2008) from its main base in Kuala Lumpur, and Thai AirAsia (THA) serves Chennai (launched March 2012) and Kolkata (December 2010) from Bangkok, (ASW) has also served (and subsequently dropped) routes from Kuala Lumpur to Hyderabad and Thiruvananthapuram, and Bangkok to Delhi, as well as dropping AirAsia X (ASX) services from Kuala Lumpur to both Delhi and Mumbai which it launched in 2010.
4 domestic Indian carriers have objected to the Tata - Singapore Airlines (SIA) full-service airline venture, slated to launch at the end of this year. The 4 airlines: (IndiGo (IGO), SpiceJet (ROJ), Go Air (GOZ) and Jet Airways (JPL)) which control three-fourths of the country’s airline market, have requested the yet-to-be named airline be denied permission to launch.
The carriers have written to the Directorate General of Civil Aviation (DGCA) under the banner of the Federation of Indian Airlines (FIA). They argue the amended foreign direct investment (FDI) rules, which allow foreign airlines to buy up to 49% equity in Indian carriers, were meant for existing carriers, not startups. Indian airline analysts said the carriers are trying a last ditch effort to protect their turf.
Tata - (SIA) Ltd (TASL) is a joint venture (JV) between Indian conglomerate Tata Sons Ltd (with a 51% stake) and Singapore Airlines (SIA) (49%). The airline has begun hiring this week. It plans to start with a fleet of 5 A320s and an initial investment of $100 million.
The airline’s board has cleared the appointment of Singapore Airlines (SIA)’s Phee Teik Yeoh as (CEO).
In February, the (FIA) tried to block AirAsia India (AAI), a new low-cost carrier (LCC) that launched this month. (AAI) is also a new company (a (JV) between the Tatas, Malaysia’s AirAsia Bhd and Arun Bhatia of Telestra Tradeplace.
The regulator dismissed the objections, saying the government made it clear the policy was meant for both existing and new airlines. In a move that will help the 2 new airlines, the Indian government has agreed in principle to scrap a rule requiring airlines to operate for 5 years or have a fleet of 20 airplanes before they are allowed to launch international flights. The rule has prevented incumbent carriers from launching more lucrative, international operations. The Indian airline industry is in a crisis mode with most carriers reporting losses over the past 4 years.
July 2014: AirAsia India (AAI), the latest sub-brand of the low cost carrier (LCC) AirAsia (ASW) mega-brand, has added its 3rd domestic route from its Bangalore (BLR) base, the world’s 124th busiest airport, with daily Kochi (COK) services. Flown by (AAI)’s 180Y-seat A320s, the route began on July 20th and will face competition from nearly 50 existing weekly services. These are split between the 4 incumbents: (Jet Airways (JPL) (20x-), Alliance Air (ALX) (9x-), Spicejet (ROJ) (7x-), and IndiGo (IGO) (6x-).
September 2014: India’s airports have reported passenger growth of +7.3% to 46.06 million in the 2nd quarter of 2014. Domestic demand has risen by +7.4% to 33.76 million, while international traffic has increased by +7.0% to 12.30 million. Mumbai was the fastest-growing among India’s top 6 busiest airports, seeing passenger numbers rise by +9.2% to 8.8 million in the period April to June 2014. Among the country’s smaller airports there was impressive 2nd quarter growth from Bagdogra (+47.3%), Dibrugarh (+33.7%), Ranchi (+30.0%), Leh (+29.3%), Varanasi (+27.9%), and Amritsar (+25.6%).
Bagdogra Airport, located in West Bengal in the NE of India, has welcomed several new services in the last year. In December, IndiGo (IGO) launched daily flights from both Guwahati and Kolkata, as well as Delhi flights in February of this year. Last month saw the airport’s 1st ever international flights operated by an Indian carrier with the introduction of SpiceJet (ROJ)’s flights to Kathmandu, Nepal.
India’s domestic aviation market grew by +4.5% in April, +5.5% in May and +12.6% in June. This double-digit growth coincided with the launch of AirAsia India (AAI), which operated its 1st commercial flight between Bengaluru and Goa on June 12th. Since then, it has added flights to Chennai and Kochi, and is scheduled to add Chandigarh and Jaipur to its network this month.
According to the (DGCA), in its 1st full month of operations (July) AirAsia India (AAI)’s share of the domestic market was 0.5%. Leading the way is IndiGo (IGO) with 30.7% followed by SpiceJet (ROJ) (20.9%), Air India (IND) (18.0%), Jet Airways (JPL) (15.7%) and GoAir (GOZ) (9.2%). JetLite (SAQ) accounts for a further 3.9% of the market while Air Costa has 1.1%.
Before the end of the year, at least 1 further new carrier is likely to enter the market with the joint venture (JV) airline between Tata Group and Singapore Airlines, now named Vistara (VST), expected to start commercial operations some time in October. (VST)’s planned route network has not yet been revealed, but the full service carrier is believed to be concentrating on routes in the N part of India.
International traffic at India’s airports grew by +7% in the 2nd quarter of 2014. Delhi and Mumbai are the 2 busiest airports by far for international passengers, but with growth of +8.3%, Mumbai has narrowed the gap to Delhi, which grew by just +2.8% during this period. Airports which have seen significant growth in international traffic between April and June, include Madurai (+82.9%), Pune (+82.0%), Jaipur (+38.2%) and Tiruchirappalli (+30.0%).
Madurai’s rapid international growth is down to the launch of SpiceJet (ROJ)’s service to Dubai on November 22nd 2013, while Pune has benefited from the launch of a 4x-weekly, SpiceJet (ROJ) service to Sharjah on September 21st 2013. Jaipur became Etihad Airways (EHD)’s 10th destination in India, when a new service from Abu Dhabi was introduced on April 2nd.
AirAsia India (AAI) has grown its fledgling network by adding its 4th and 5th routes from Bengaluru (BLR). On September 5th, daily flights were launched on the 1,938 km route to Chandigarh (IXC) and on the 1,521 km route to Jaipur (JAI). Both of these routes are already served by other carriers. IndiGo (IGO) offers daily flights on both routes, while Air Costa also operates daily flights on the Jaipur route. In the year-ending March 2014, Chandigarh airport handled just >1 million passengers, while Jaipur processed just <2 million passengers.
May 2015: India’s newest low-cost carrier (LCC) AirAsia India (AAI) will set up a 2nd regional hub in Delhi from May 21, extending its reach from its Bangalore home base and its Maintenance Repair & Overhaul (MRO) center in Chennai.
(AAI) (a joint venture (JV) between AirAsia (ASW), Tata Sons Ltd and Telestra Tradeplace) operates flights using 3 A320s from its main Bangalore hub to Chennai, Kochi, Goa, Jaipur, Pune and Chandigarh.
(AAI) has backtracked on its original plan not to fly from Delhi and Mumbai because of high airport taxes. However, Tata Sons’ (JV) with Singapore Airlines (SIA), Vistara (VST), also operates out of Delhi, bringing a new aspect on both airline’s operational perspectives.
AirAsia India (AAI)’s 1st flight schedules from Delhi will cover Bangalore, Goa and Guwahati destinations, as part of what (AAI) (CEO) Mittu Chandilya described as “a continued building on our network throughout India through both our Northern and Southern hubs.”
(AAI) has already moved its southern hub from Chennai to Bangalore in a bid to offer better facilities to passengers. Currently, (AAI) is restricted to flying local routes until it has a 5-year track record and a minimum fleet of 20 airplanes (rules it is keen to see changed).
“AirAsia (ASW) will fight those who try to protect the status quo by lobbying for antiquated rules,” (ASW) (CEO) and Founder Tony Fernandes said, adding that existing Indian carriers are “lobbying to protect their own bottom line as opposed to competing,” rather than putting customers first.
June 2015: News Item A-1: India's Tata Group is planning to increase its shareholding in AirAsia India ((IATA) Code: I5, based at Chennai) (AAI), "Bloomberg News India" has reported. The firm, which currently holds a 30% stake in AirAsia India (AAI), is in talks with 21% shareholder Telestra Tradeplace the newswire said quoting AirAsia (ASW) Founder & Group (CEO) Tony Fernandes.
The Indian carrier's remaining 49% stake is controlled by Malaysia's AirAsia Group Bhd.
In May, "the Times of India," citing unnamed sources, said Arun Bhatia of Telestra Tradeplace was reportedly looking to sell his 21% stake in the airline. Tata currently controls a 51% majority shareholding in Vistara ((IATA) Code: UK, based at Delhi International) (VST), a joint venture (JV) with Singapore Airlines (SIA).
Launched in 2014, AirAsia India (AAI) operates 5 A320-200s on flights to 10 destinations locally.
News Item A-2: AirAsia India (AAI)) has put its ambitious expansion plans on hold as it awaits the Indian government's decision concerning the future of the contentious "5/20" rule. New Delhi is considering replacing the rule (an airline must have been in service for at least 5 years and operate at least 20 airplanes before applying for international traffic rights) with a credit-based scheme in which airlines earn the right to venture abroad by 1st plying domestic routes.
July 2015: AirAsia India (AAI) is an Indo-Malaysian low cost carrier (LCC). Initially announced on February 19, 2013, (AAI) is a joint venture (JV), with Air Asia Berhad holding 49% of the airline, Tata Sons holding 30%, and Telestra Tradeplace taking up the remaining 21% in the airline. The joint venture (JV) marked Tata's return to aviation industry after 60 years. AirAsia India (AAI) commenced operations on June 12th, 2014.
(IATA) Code: I5. (ICAO) Code: IAD - (Callsign - ARIYA).
Frequent Flyer Program: BIG.
Company Slogan: "Now Everyone Can Fly."
Headquarters: Chennai International Airport, Chennai, Tamil Nadu State.
Main Base: Kempegowda International Airport, Bangalore (Bengaluru), Karnataka State.
Hub: Indira Gandhi International Airport, Delhi, Delhi State. Flights operated to main home base in Bangalore with 2 A320s based here in Delhi.
Chandigarh Airport, Chandigarh, Chandigarh State;
Chennai International, Chennai, Tamil Nadu State;
Goa International Airport, Goa, Goa State;
Imphal International Airport, Imphal, Manipur State;
Jaipur International Airport, Jaipur, Rajasthan State;
Lopriya Gopinath Bordoloi International Airport, Guwahati, Assam State;
Pune Airport, Pune, Maharastra State;
Visakhapatnam Airport, Visakhapatnam, Andhra Pradesh State.
August 2015: News Item A-1: AirAsia (ASW) reported 2nd-quarter net profit of +MYR243 million/+$64.3 million, a -43.7% year-over-year (YOY) drop from the +MYR367.2 million the company posted in the June 2014 quarter. (ASW) said the drop in profit was due to unrealized foreign-exchange losses on borrowings and one-off costs related to the company’s sale and leaseback of aircraft during the quarter.
(ASW)'s 2nd-quarter revenue grew +1.1% (YOY) to MYR1.32 billion, despite "an absence of marketing activities in the 1st quarter due to the [December 28, 2014] QZ8501 incident, which affected forward sales in (2Q) 2015," (ASW) said.
Operating expenses rose +1.1% (YOY) to MYR1.08 billion; (ASW) posted an operating profit of +MYR243.5 million, up +39.8% (YOY).
(ASW) saw +6.7% (YOY) passenger growth, to 5.95 million passengers, during the quarter. Traffic increased +6.8% (YOY) to 7.26 billion (RPK)s, capacity rose +(6.6)% (YOY) to 9.1 billion (ASK)s, and the passenger load factor for the quarter came to 79.8% LF.
(ASW)'s (RASK) during the 2nd quarter fell -5.3% (YOY) to [USD] 3.96¢, a drop of -0.22¢. (CASK) was down -10.8% (YOY), to 3.24¢ ((CASK) excluding fuel was up +2.3% (YOY), to 1.81¢. (ASW)'s average fuel price per barrel fell -25.4% (YOY) during the quarter, from $114 to $85. "As seen in (2Q) 2015, we are beneficiary of the low fuel price," (ASW) Group (CEO), Tony Fernandes said. "As of now, the Group has hedged 50% of its fuel requirements for 2015 at an average cost [USD] $88 per barrel on jet kero and remains unhedged for 2016."
Among AirAsia Berhad's associate/affiliate airlines, Thai AirAsia (THA) reported a swing to profitability, with a second-quarter net result of +THB374 million/+$11 million, marking a (YOY) increase of +MYR692 million. Traffic on Thai AirAsia (THA) grew +25.2% (YOY) to 3.57 billion (RPK)s, as capacity increased +20.3% (YOY) to 4.41 billion (ASK)s. (THA)'s resulting passenger load factor for the quarter came in at 81% LF.
Indonesia AirAsia (AWR)'s quarterly net loss deepened to -IDR486.4 billion/-$36.4 million, compared to (AWR)'s -IDR340.3 billion loss in the 2014 June quarter. (AWR) traffic fell -4% (YOY) to 2.2 billion (RPK)s; capacity was up +1.8% (YOY) to 3 billion (ASK)s; passenger load factor for the quarter was 73.4% LF.
AirAsia Philippines (APG)'s net loss lessened (YOY) to -PHP777 million/-$17.2 million, an improvement over (2Q) 2014 by +PHP555 million. Traffic on the airline increased +3.5% (YOY) to 894 million (RPK)s, capacity decreased -8.1% (YOY) to 1.15 billion (ASK)s, and the resulting passenger load factor for the quarter came to 77.6% LF.
Start-up low-cost carrier (LCC) subsidiary, AirAsia India (AAI) saw a net loss of -INR441.5 million/-$6.92 million for the quarter, but posted operating revenue of INR1.15 billion. 2nd-quarter traffic was reportedly 332 million (RPK)s, capacity was 398 million (ASK)s, and (AAI)’s passenger load factor was 83.4% LF.
News Item A-2: The Tata Group has moved ahead with plans to increase its stake in AirAsia India (AAI) local media have reported. The conglomerate reportedly acquired an 11% stake from fellow Indian shareholder Telestra Tradeplace bringing its total shareholding in the budget carrier to 41.06%, while Telestra's has been reduced to 10%.
The Tata Group reportedly plans to boost its stake up to 48%.
Malaysia's AirAsia (ASW) remains the largest overall shareholder in AirAsia India (AAI) with 49%.
News Item A-3: New entrant low-cost carriers (LCCs) to India, including Singapore Airlines (SIA)-backed Vistara (VST) and AirAsia India (AAI), are facing potential schedule disruptions at Indira Gandhi International Airport (IGIA) in Delhi. Both airlines have been flagged as having likely takeoff and landing limitations imposed during low-visibility days at the Delhi hub this winter.
Delhi, frequently a victim of severe smogs, sees hundreds of flights canceled every winter due to poor visibility. The airport is fitted with (CAT IIIB) automated landing-guidance systems in place, but requires both airplane and aircrew (FC) to be certified before they can utilize them.
Vistara (VST) said that has been "working closely" with the Directorate General of Civil Aviation (DGCA) India to ensure both its aircraft and crews were compliant with (CAT IIIB) certification for low-visibility conditions, but admitted it was not yet at that stage.
"We are hopeful of getting the certification in time [for] uninterrupted operations during the forthcoming winter season,” it said.
Similarly, recent start-up AirAsia India (AAI) is said to be still working through the process of obtaining certification for low-visibility operating conditions, even though its aircraft (Airbus A320s) are fully (CAT IIIB)-compliant.
Indian state carrier, Air India (AIN(/(IND) faced similar restrictions last winter, when it tried to reroute some of its non-(CAT IIIB) Boeing 787 airplanes through Delhi, but were unable to land in foggy conditions due to lack of the required certification.
News Item A-4: AirAsia India (AAI) and Air Costa (CST) have become the latest carriers in India to deploy (SITA) OnAir’s (AIRCOM) services. The technology will help them streamline their operations using (SITA) OnAir’s unique (VHF) network, which covers the whole of India. (SITA) OnAir also provides both airlines with (AIRCOM) FlightTracker so they can track flights in real time throughout their entire route network; flight tracking is a mandatory requirement for all Indian-based carriers.
News Item A-5: Air Asia India (AAI) currently operates 5 aircraft to 11 destinations, on 12 routes and 36 daily flights.
December 2015: Malaysian low-cost carrier (LCC) parent group AirAsia Berhad reported a net profit of +MYR160.4 million/+$35.9 million for the 2015 3rd quarter. The company posted revenues of MYR2.8 billion and an operating profit of +MYR332 million.
AirAsia Berhad’s operating segments include associate/affiliate carriers Malaysia AirAsia (ASW), Thai AirAsia (THA), Indonesia AirAsia (AWR), AirAsia Philippines (APG) and AirAsia India (AAI). In spring 2016, the group’s reconfigured subsidiary AirAsia Japan (WAJ) will launch service from Nagoya’s Chubu Centrair International Airport.
“We are witnessing the positive effect of rational pricing and its impact towards passenger travel patterns,” AirAsia Berhad (CEO) Tony Fernandes said in his quarterly outlook statement. “In Malaysia, all signs report toward rational and sustainable growth in the coming quarters, as other players have significantly reduced capacity and rationalized their routes, while the irrational price war that took place in the past is over.”
Citing increased demand by Chinese travelers since May 2015, a +21% year-over-year (YOY) surge, as well as low fuel prices, “we see a great end to the year and a light at the end of the tunnel for [our] Malaysian operations after a series of headwinds that affected our operations,” Fernandes said.
The consolidated AirAsia Berhad group showed passenger growth of +20% (YOY) to 12.88 million passengers during the quarter. Traffic demand increased +22.4% (YOY) to 15.19 billion (RPK)s, as capacity grew +18.1% (YOY) to 18.86 billion (ASK)s. The group’s load factor for the quarter came to 80.5% LF, up +2.8 points (YOY).
Malaysia AirAsia (ASW) posted a 2015 3rd-quarter net result of +MYR166.1 million/+$37.1 million, up +61.4% (YOY) from +MYR102.9 million in (3Q) 2014. Traffic on (ASW) was up +19% (YOY) to 7.77 billion (RPK)s as capacity increased +12% (YOY) to 9.57 billion (ASK)s. (ASW)’s resulting passenger load factor for the quarter was 81.2% LF.
AirAsia India (AAI) deepened its 3rd-quarter net losses to -INR652.5 million/-$9.8 million, compared to its (3Q) 2014 loss of -INR 529.7 million. Traffic on the start-up airline was at 502 million (RPK)s for the quarter, capacity was at 663 million (ASK)s and its passenger load factor came in at 75.7% LF.
March 2016: "Telestra to Sell Out of AirAsia India (AAI)" by (ATW) Jeremy Torr, March 30, 2016.
Founding investor in AirAsia India (AAI), Telestra Tradeplace, plans to sell out of its shareholding in the 2-year-old, low-cost carrier (LCC).
(AAI) will sell its 10% shareholding partially to co-Founder, Tata Sons, which will take 7.94%, with AirAsia India (AAI) Directors taking the remainder.
This will increase Tata Sons’ holding to 49% from its existing stake of 41.06%, but will still leave parent company AirAsia (ASW) with a minority share of 49%.
Telestra originally took a 21% holding in the start-up, but reduced its stake to 10% in late 2015.
“The agreement [to buy Telestra’s holding] was entered into on March 14, 2016, and the transaction is proposed to be completed in April 2016, subject to completion of the relevant corporate approvals and processes,” Tata said.
AirAsia (ASW) Founder, Tony Fernandes expressed satisfaction with the sale, tweeting that: “It is great to see Tata so confident on the future of Airasia India (AAI)."
Reports of Telestra looking to sell out of the joint venture (JV) have been circulating since mid-last year.
(ASW) said it planned to take delivery of 2 more Airbus A320s in coming months, and added that it was looking to add >10 new aircraft to its current 6-strong fleet.
April 2017: Boeing Digital Aviation subsidiary Jeppesen has signed with the AirAsia Group to provide digital charting and electronic flight bag (EFB) services across AirAsia (ASW)’s 6 low-cost carrier (LCC) affiliates.
The multiple-year agreement will cover AirAsia (ASW)’s 6 affiliate (LCC) airlines: AirAsia Berhad (Malaysia) (ASW), Thai AirAsia (THA), AirAsia India (AAI), AirAsia Japan (WAJ), Indonesia AirAsia (AWR) and Philippines AirAsia (APG). The AirAsia Group will integrate Jeppesen FlightDeck Pro (EFB) services on Windows-operating tablets to optimize operations, eliminate paper content and improve fuel consumption, the company said.
The agreement with the AirAsia Group follows on Jeppesen’s existing (EFB) service agreement with another of the group’s affiliates, long-haul (LCC) AirAsia X (ASX).
“We had previous experience with digital Jeppesen services with our AirAsia X (ASX) affiliates and extend[ing] these digital navigation and (EFB) services across the AirAsia Group will allow us to continue our transition to a fully digital operating environment,” AirAsia (ASW) Regional Director Flight Operations Adrian Jenkins said.
August 2017: AirAsia India (AAI) has celebrated the beginning of August with the launch of 5 new domestic routes. 4 are from Kolkata (CCU). Sector lengths range from 380 km on the Kolkata to Bhubaneswar route to 1,355 km for the Jaipur (JAI) route. IndiGo (IGO) already serves all 5 of these sectors with multiple daily flights. On the Delhi (DEL) route, (AAI) becomes the 8th carrier to connect the 2 major cities.
According to AirAsia (ASW) its Indian subsidiary (AAI) operated with a load factor of 90% LF in 2017 (Q2) and carried just >1 million passengers, up +89% compared with the same period in 2016. Capacity was up only +83% resulting in a +3% point improvement in load factor. The average sector length fell -21% to 989 km.
A total of 11 180Y-seat A320s are now operated by (AAI), with 3 having been added this summer, all of which were formerly operated by Frontier Airlines (FRO) in the USA. In total, AirAsia India (AAI) now operates 25 domestic routes in India.
Routes as follows:
Bengaluru (BLR) to Bhubaneswar (BBI), vs IndiGo (IGO) (14x-);
Kolkata (CCU) to Bagdogra (IXB), vs IndiGo (IGO) (21x-), SpiceJet (ROJ)(14x-), GoAir (GOZ) (7x-), JetKonnect (7x-), Air India (AIN)/(IND) (3x-);
Kolkata (CCU) to Bhubaneswar (BBI), vs IndiGo (IGO) (21x-), Air India (AIN)/(IND) (7x-);
Kolkata (CCU) to Delhi (DEL), vs IndiGo (IGO) (69x-), Air India (AIN)/(IND) (28x-), Jet Airways (JPL) (28x-), SpiceJet (ROJ) (21x-), GoAir (GOZ) (14x-), Vistara (14), JetKonnect (7)
Kolkata (CCU) to Jaipur (JAI), vs IndiGo (IGO) (21x-), GoAir (GOZ) (7x-).
June 2018: AirAsia India (AAI) began a new domestic link between Bengaluru (BLR) and Surat (STV) on June 1. (AAI), the low cost carrier (LCC) will operate the 1,025 km sector daily with its A320s and faces no direct competition. According to (AAI), the load factor on the Bengaluru to Surat sector was 78% LF, while the return flight was practically full with a 96% LF load factor.
(AAI) describes Surat as “a business hub with a dominant presence of diamond and textile industries.” It adds that a large number of merchants travel out from Surat on business, and that this presents an opportunity to open up the market. The (LCC) now serves 20 destinations in its home market with hubs at Bengaluru, Delhi and Kolkata.