Malaysian carrier AirAsia's strategy of offering the lowest fares in the industry and occasional free seats may stand in the way of getting a no-objection certificate (NOC) from the civil aviation ministry, two officials said. AirAsia is planning a three-way joint venture with Tata Sons and Telestra Tradeplace to start an airline in India.
After a Foreign Investment Promotion Board (FIPB) clearance, AirAsia must secure an NOC from the civil aviation ministry before approaching the directorate general of civil aviation for a scheduled operator's permit.
"The applicant must provide a detailed business plan including feasibility report for the routes it wants to fly on and prove its ability to fly on a sustainable basis," a ministry official said. "We will assess what kind of fares they plan to offer and whether it would be sustainable, given the tax and cost structure in the industry. We cannot have uncompetitive fares since it is bad for the health of the industry. Also, we cannot let the airline go into losses even if its promoters are rich," the official said.
10/04/13 Debabrata Das/Indian Express
