Mumbai:Indian airline companies would have been more interested in listening to what Tony Fernandes, CEO of AirAsia had to say about his business plan. After listening to him most of them would have gone back to their drawing board.
For one,Tony Fernandes said that he will break even with 57-58% occupancy load with 7-8 aircrafts, that too in the first year of operation. This is unheard of in the Indian airlines sector, where passenger load of over 70% is needed to breakeven. Importantly, AirAsia intends to do so by offering lower rates.
What this means is that Indian companies will have to tighten their belts further by bringing down rates, at least in the routes where AirAsia is operating and by cutting cost drastically.
AirAsia management has said that they are hiring at the market rates, clearly signalling that it has its eyes on the cost button. It was earlier reported that AirAsia might poach on pilots from IndiGo.
02/07/13 Shishir Asthana/Business Standard
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For one,Tony Fernandes said that he will break even with 57-58% occupancy load with 7-8 aircrafts, that too in the first year of operation. This is unheard of in the Indian airlines sector, where passenger load of over 70% is needed to breakeven. Importantly, AirAsia intends to do so by offering lower rates.
What this means is that Indian companies will have to tighten their belts further by bringing down rates, at least in the routes where AirAsia is operating and by cutting cost drastically.
AirAsia management has said that they are hiring at the market rates, clearly signalling that it has its eyes on the cost button. It was earlier reported that AirAsia might poach on pilots from IndiGo.
02/07/13 Shishir Asthana/Business Standard
