Friday 29 Mar 2024
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KUALA LUMPUR: AirAsia Bhd group chief executive officer Tan Sri Tony Fernandes is confident that its 49%-owned associate AirAsia India will be profitable this year, and he expects 2016 to be a “very good” year for its Indian operations.

“We are doing better than we had expected,” he told reporters after launching the airline’s Kuala Lumpur-Goa direct flight yesterday.

“When you start an airline, you are not going to make profits in year one, so we have predicted to make losses,” he added.

According to Fernandes, efforts made by other Indian airlines to thwart AirAsia from making inroads into the market had backfired.

“Because of the amount of press coverage we got from the other airlines that were whacking, suing and blocking us, AirAsia India became like a Robin Hood, fighting against the big boys,” said Fernandes.

AirAsia India posted a loss of 44.15 crore rupees (RM28 million) in the quarter ended June 30, 2015. It started operations in June last year.

Some analysts commented that India is a highly competitive market that pressures airlines’ yields.

Fernandes said AirAsia India is targeting to increase its fleet size to eight aircraft soon from the current six.

He also said the airline is planning to offer flights to Coimbatore, Madurai, Delhi and Bombay within the next two years. Meanwhile, Fernandes reiterated that AirAsia still wants to collaborate with new national carrier Malaysia Airlines Bhd (MAB) in areas of maintenance of operations.

He noted that some of the areas that both MAB and AirAsia stand to benefit from are maintenance, repairs, operations, training and aircraft ground handling.

“I have always spoken about it (collaboration), but I think MAB was focusing on restructuring itself,” he said.

“Now that [it is] done, I’m sure we will sit down and discuss how we can collaborate,” he added.

Fernandes said as both companies are facing pressure from a weak ringgit, collaborations in the identified areas would result in cost savings.

 

This article first appeared in digitaledge Daily, on September 4, 2015.

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