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BW Businessworld

‘Festive Season To Fuel Air Travel Growth’

Sunil Bhaskaran, MD & CEO, AirAsia India speaks with Ashish Sinha of BW Businessworld about the green shoots of revival in air travel, the induction of Airbus A320-Neo, and the rapid recovery of demand as more restrictions are getting lifted, among other things. Excerpts:

Photo Credit :

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How did the lockdown impact your business?

Compared to others, we fared relatively better given our insulation from operating outside the domestic sector (we don’t fly international) and began our contingency and business continuity plans earlier with the benefit of insights and learnings from other AirAsia Group airlines operating in China and the ASEAN region. Immediately after the government announced the lockdown and suspension of air travel, we implemented our Business Continuity Plans and complemented these with a host of activities and initiatives. When airline operations were suspended for two months—25 March onwards—90 per cent of our staff at the front-end were working from home. 

What is your current fleet size? Are you planning to induct more aircrafts?

Currently, we operate with a fleet of 31 aircrafts flying to 19-destinations across the country. We have made key investments in digital transformation projects as part of our strategy and have inducted our very first Airbus 320-Neo aircraft recently. Sensing the passenger demand and the launch of new routes, we will continue to amplify our operational assets to match the market needs. 

Did the pandemic impact consumer preference? What new trends do you foresee going forward?

While the initial reopening of travel witnessed apprehension on safety and hygiene, both travelers and the aviation industry have quickly adapted to the new norms. In general, the trends we are observing are positive and indicate an openness by Indian consumers, especially among the youth who now form our core demographic and for whom brand choice is driven by value, availability and quality. We observed that a lot of queries were coming in from flyers with regard to various travel advisories issued by the state authorities. The check-in process has been enhanced allowing customers to submit health related self-declaration as a regulatory requirement, as well as proactively providing easy information about travel advisories across our network. We remain very active on social media and utilise our channels to communicate with guests on changing norms, regulations and measures. AirAsia launched a Flexit campaign for all guests without any surcharge, allowing guests to change their travel date with a 100 per cent date change fee waiver. 

You are now in the sixth year of your India operations. If the pandemic had not happened, what were the plans for 2020-21 for India? How did it get impacted?

Before the pandemic we were growing at 30-35 per cent yearon- year and had planned for a similar growth trajectory even in this year. In fact, based on the projected growth plans we had already committed to taking deliveries of new aircraft (Airbus A320-Neo) in this year which we continue to honour despite a sharp drop in demand due to the pandemic. We continue to invest in our people and the business despite the odds. The surge in traffic over the long 2ndOctober weekend was another encouraging sign of demand for domestic holiday. We are hopeful of continued growth in demand as we enter the festive season.  

How do you see growth in domestic aviation in the next one year and what strategy do you plan to adopt? Domestic demand for air travel in India has been steadily picking up, especially since states have started lifting travel restrictions and quarantine requirements. The demand has already recovered to 40 per cent of pre-Covid levels and we expect the gradual recovery to continue. We have been agile in our network planning to quickly realign our network based on the demand trends being observed. We are aligning our operations, expansion and network plans with our demand projections while expecting to reap the benefits of the cost optimisation and efficiency measures deployed and adopted in this period. We continue to work towards scaling up our business in keeping with our stakeholder interests and promoter expectations on the road to recovery.

What is your take on the rise of Cargo Business and its contribution during the pandemic?

Since the lockdown, AirAsia India has operated many cargo-only flights carrying different types of commodities in addition to general cargo such as Covid supplies, PPE kits, face masks, medicines, and marine products. Bestin- category pricing, with a cargo capacity of 14 tonnes, customised logistics services as per special business requirements, AirAsia India schedules flights at the client’s convenience making it one of the most preferred cargo services providers. Over the last few months we have significantly strengthened our cargo offering with capability to handle many commodities including dangerous goods, valuables and wetcargo. As a result, we are already carrying more cargo volumes than during the pre-Covid period despite operating a smaller proportion of flights compared to pre-Covid levels.