Indias Newest Airlines to Commence Operations Next Year

Thursday, 12th December 2013 at 16:56pm

AirAsia India was originally scheduled to launch its maiden service by November this year after it secured its no-objection certificate in the middle of September. However, it is now targeting a new date, March next year, to finally commence operations.

The scheduled launching of AirAsia India's operation before the end of this year was highly anticipated within the industry. With the revised launch date, Tony Fernandes, AirAsia Bhd CEO and owner, declined to comment when sought for his opinion about the delay.

The airline start-up can only begin flying two months after it secures an air operator's permit (AOP). In the case of AirAsia India, the process is somewhat delayed already, considering that it has secured its no objection certificate in September. The airline was expecting to get its AOP a few weeks after that so that it can launch commercial operations by November.

The March 2014 revised launch date has been set, assuming that the airline gets its AOP by January which is already long overdue.

According to the Indian aviation law, it can only grant AOP to a new airline after a thorough assessment and evaluation for its preparedness to operate. These include sufficient number of aircraft, manpower, aircraft parking space at airport as well as engineering facilities.

Though the majority stakes of AirAsia India are owned by Indian partners, it is AirAsia Bhd holds the controlling stake, at 49%. The majority stakes are shared between Tata Group and Telestra, holding 30% and 21% respectively, making them both minority stakeholders.

Tata SIA Airline, on the other hand, is scheduled to launch its commercial operations by the middle of next year, tentatively by June.

Unlike AirAsia India, however, Tata SIA Airlines is yet to obtain a string of regulatory clearances from the Indian government such as the no objection certificate and the AOP. Though its application for the location of its headquarters, which is in New Delhi, was only approved recently.

Again, unlike AirAsia India, the airline will operate as a full-service airline.

Both airlines, incidentally, are co-owned by Tata Group, India's largest conglomerate. Tata Group has partnered with AirAsia Bhd of Malayasia to set up the local subsidiary, AirAsia India. It has also set up a joint venture with Singapore Airlines to create Tata SIA Airline, a full-service carrier.

Tata Group owns the majority of the joint venture, at 51%, while Singapore Airlines holds the rest or 49% of the total shares. It will not, in anyway, compete directly with Tata Group's other partly-owned AirAsia India, as was feared by its business partners.

By: Pete Lee.