AirAsia India Finally Permitted to Fly

Thursday, 8th May 2014 at 08:44am

AirAsia India might have got a sigh of relief after DGCA granted them the permit to fly. But the question is, do the more established players welcome them?

India's already crowded skies will get even more crowded with the entry of AirAsia India, the local affiliate of Malaysia-based AirAsia Bhd., which will take off anytime soon.

The joint venture between Malaysia's AirAsia Bhd., India's Tata Group, and Telestra Tradeplace was founded in early 2013 after the Indian government relaxed its FDI policy in commercial aviation business that involved local and foreign entities. The newly-amended FDI policy states that foreign investors can own up to 49% maximum shares in any local-based airline business.

In the previous policy, foreign investors were only allowed up to 24% stakes ownership or less than 1/4 of the total shares.

On Wednesday, DGCA granted the airline an air operator's permit after more than a year of wait. The venture has to go through many legal obstacles before it finally received its permit to start operations.

Mittu Chandilya, the CEO of the new budget carrier, is optimistic that they will finally take off in one to three months after the new government is installed following this month's general election.

Tony Fernandes, the founder of the low-cost leader, couldn't hide his feelings when he tweeted how ecstatic he was with DGCA's gesture of approval. He expressed his gratitude to the Indian government, more particularly to DGCA, for this latest development.

However, seems like Tony Fernandes' jubilation will be temporarily short-lived as his venture has to go through some more hurdles, one of which is the validity of its permit which will be decided by Delhi High Court.

To recall, a group opposed to the joint venture filed a case against the respondent airline citing violations committed on the recently-amended FDI policy.

The BJP leader, Subramanian Swamy, claimed that the joint venture has put the government in a disadvantageous position. The case will be heard on July 11, 2014 by a special bench.

According to aviation experts, AirAsia India should not rush things up and should wait until after 4 to 5 months before they launch their maiden operations. They should see to it that slots are approved, schedules are in place and marketed, logistics in each station have to be in place and lastly, but not the least, recruit more applicants to get ample number of initial workforce during the inaugural operations.

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