Saturday, September 30, 2017

'We offer more choices than a full-service carrier'

AirAsia India calls itself a three-year-old ‘startup’ airline. But this young carrier has grown in leaps and bounds over the last couple of years, stating, ‘Now everyone can fly’, thanks to its deep connectivity. With plans to fly international next year, the airline’s MD and CEO Amar Abrol explains to Hrithik Kiran Bagade of DH about its quick ascent to such heights in the competitive Indian airline market. Edited excerpts:

What’s the latest at AirAsia India?
In our first year of operations (2014-15), we carried five lakh passengers, with just three planes. Fast forward to now, and since last year’s April, we’ve tasted new-found growth.

From six planes last year, we have 12 as we speak. The 13th plane is going into operation from the coming month, while the 14th plane comes in December. We eye 21 aircraft by late next year. All our aircraft are leased A320-200s. AirAsia India is the fourth fastest growing airline in the world in terms of capacity addition. All this is happening since last April, when the new management team came into being.

Why specifically the A320-200? What about looking at the A320neo (New Engine Option)?
The A320-200 is the model that we’ve been flying. The average vintage of our aircraft is around six years, which is sort of the right price for a young airline like us. There’s a reason why we have six-year-old planes, as it’s the optimal lease cost when it comes to a plane. Our first objective is to be profitable, and then we’ll look at new aircraft, whether it’s the neo or any other extended capacity planes from the Airbus A320 Family.

You specifically mentioned April 2016. Until then, was it largely consolidation?
The ex-CEO (Mittu Chandilya) left in March last year, and I came on board in April. Obviously, there was a little bit of a hiatus for six months, when things had slowed down a bit. After I stepped in, and a few others joined me, we worked together to consolidate the company. Since then, we’ve been on a growth path. In April 2016, we were somewhere around 650 people in the company, today we are 1,500 people. The number of stations has gone up from eight to 16. By the end of FY 2017-18, we’ll be a Rs 1,800-crore company, from the current Rs 1,000 cr, on the back of capacity, destinations, planes, load factor, and increased frequencies. Our market share is 3.7%, with an average load factor of 88%.

With the government talking ‘UDAN’, what’s your perspective?
We’ve been doing ‘UDAN’. A large chunk of our destinations include Tier-II and smaller cities, apart from metros. That’s where the growth and opportunity are. For instance, if you look at the Delhi-Mumbai corridor, there are 60 flights daily, with hardly any slots available at either destination. On the other hand, there is a population of 330 million who can afford to fly, out of which only about 75 million actually do fly. Hence, there is huge opportunity mainly in the Tier-II and Tier-III markets. Based on our own studies, among all of our guests, 20% of them are first-time flyers ever, and 40% of them are first-time flyers on AirAsia. Basically, we’re creating demand. People appreciate our product, which offers leather seats, delectable meal options, superior service and so on. Our fees for baggage, processing and cancellation are the lowest.
30/09/17 Hrithik Kiran Bagade/Deccan Herald
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