Quo Vadis Tony Fernandes?

Saturday, 23rd March 2013 at 03:20am

Where, in the world, is Tony Fernandes? Seems like India's Civil Aviation Minister suddenly gets interested in the man he didn't like to see.

Recently, the Indian government has formally approved the joint venture of Tony Fernandes and India's largest conglomerate, Tata Group, to set up a local subsidiary of his successful AirAsia company.

While the joint venture got the green signal from the government, the Ministry has been seeking clarification on Press Note 6 allowing foreign carriers to own a higher equity of up to 49% in an Indian airline. The Minister has insisted that such provision is only applicable to existing airlines and that clearly disqualifies the joint venture made between AirAsia and Tata Group.

The minister, though, is at sea as to where has Tony Fernandes gone these days? Why didn't he submit his formal application to the aviation minister now that his venture is finally approved?

The Civil Aviation Minister is hopeful that the Finance Minister would issue the clarification along with the minutes of FIPB meeting two weeks ago.

But he is wondering now why the astute businessman suddenly becomes elusive after the approval of his proposal? The AirAsia founder, or anybody representing his company, should have filed a formal application for a permit to fly by now so that the concerned agencies can process it in a timely manner.

The Civial Aviation Minister clarified that an early filing of formal application is necessary to give all the concerned agencies enough time to process it which may take months, if not weeks. Among others, the Ministry will conduct a scrutiny, first and foremost, on the applicant's financial strength and its current fleet. It will also find out if the airports, where the airline is going to fly to, have open slots for additional service and whether or not they need additional capacity.

AirAsia has a large fleet of narrow-body aircraft such as the A320s but these planes, unfortunately, can't land in small airports. Thus it wants to fly only to cities with bigger airports where its planes can safely land.

The fastest-growing budget airline is eying Chennai as its main hub in India and plans to connect to Coimbatore, Kerala, Madurai, Trichy and Selam. Thus the airline only needs a regional permit, rather than a national permit.

The aviation ministry officials will soon issue statements behind the real set-up of the new airline's ownership. In a number of news reports, at 49% stake, AirAsia holds the majority shares in the venture with the rest being held by Tata group and Bhatia, owner of Telestra Tradeplace.

Many fear that the joint venture might have violated the current provision in the newly-amended aviation law. However, many also believe that AirAsia has not violated any law that was amended in September last year, allowing foreign airline to acquire up to 49% stake in a local airline.

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