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AirAsia's Tony Fernandes Says Expect 'Nano' Fares

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AirAsia, which plans to launch a budget airline in India later this year, would aggressively expand its fleet and is looking to add at least 10 planes a year, Chief Executive Tony Fernandes told reporters in Mumbai on Monday. Fernandes said AirAsia would want to offer the lowest possible fares in its Indian operations.

AirAsia, the largest budget carrier in Asia, plans to launch the airline with an initial investment of Rs 80 crore to cash in on rising demand for domestic air travel among the country's rapidly expanding middle class. AirAsia would also look at setting up some ancillary businesses in the country. "I have always said we will start in the fourth quarter. People said September, October whatever. I hope we start this year. It is not about when we start. It is about we start it right. I mean no rush," AirAsia Group CEO Tony Fernandes told reporters on his maiden visit to Chennai on Sunday.

AirAsia has formed a joint venture with Tata Sons and Arun Bhatia of Telestra Tradeplace with 49:30:21 holding to start its India operations. "We haven't got the approvals yet and I still believe we can start this year. Maybe September is a bit ambitious. I do not want to commit a date. Really, it is on the hands of the regulators to give us all the approvals. We are at the NOC stage. The key one is NOC. No, we have not get the NOC. It is with the Union Home Ministry."

AirAsia is expected to bring in competitive pricing in the Indian aviation market with its "nano" airfares. To a particular query, Fernandes said Air Asia India will be the "Chennai SuperKings of cost" in offering airline services.

"We will start with three planes. We rather not say it now (the destinations). A quick way of looking at is Tiruchirapalli. There was never a flight from Kuala Lumpur to Tiruchirapalli," he said.

"Come next week, there will be three flights a day. We have benefitted tremendous amount of people. So, we will apply tremendous amount of strategy to India and look at new destinations and markets that have been under-served."

To a query on roping in former Tata Group Chairman Ratan Tata, Fernandes said: "He (Tata) is one of the most respected businessmen in the world, not just in India. He is humble, simple guy. He fits our culture very well. He is very understated of what he achieved in India. Well, our strategy will be sitting down often with the senior management to map out the way we are going to take this airline. I want him involved."

Stating that his dream was to offer flight connectivity to every individual, Fernandes said: "I want to make sure everyone can fly. I want make sure someone who has taken a train for nine hours, can now fly for 45 minutes, for some one who took four days to come to Chennai, to do it in three hours. That's my dream."

To a query on why he opted for Chennai as base for its airline operations, Fernandes said millions of opportunities are available in Southern region. "I just loved the South. South is great. There are millions of people, and millions of tourist potential and millions of business opportunities. We are very happy with the south," he said.

When pointed out Mumbai and New Delhi account for almost 50 per cent of airline business, he said, "Yeah, but we will change that. Singapore was the King of air travel. We have rebalanced that. Malaysia is a big hub. So, Chennai will become the new king. We are kings. we will be the Chennai Super Kings of cost (in offering airline services)."

AirAsia has already put in place a strong leadership team for its India operations. Former TCS chief S Ramadorai has been appointed Chairman, while top industry leader Ratan Tata has been named as chief adviser to the board of AirAsia India.

Besides, R Venkataraman (former executive assistant to Ratan Tata) and Bharat Vasani (chief legal counsel of the Tata Group), are among the directors on the board. AirAsia will be represented by Tony Fernandes and Kamarudin Bin Meranu. Last month, Fernandes had named Mittu Chandilya as the CEO of AirAsia India.