AirAsia's India launch may see further delay

In what may further delay AirAsia's launch in India, the Directorate General of Civil Aviation (DGCA) has asked all persons likely to be affected by the grant of scheduled air operator's permit to the airline to submit their suggestions and objections to the regulator within a period of 30 days.

"In order to comply with the requirements of Schedule XI of Aircraft Rules 1937, a notice is hereby given to the public and all the persons likely to be affected by the grant of this permit to submit their objections or suggestions, if any, on the Statement of Intent (submitted by AirAsia), along with the particulars, as enclosed, within Thirty Days of the issue of this notice", DGCA stated in a notice issued on Monday (Jan 13, 2014).

The notice will delay the grant of AOP to AirAsia, which was earlier scheduled to receive its permit by end of January 2014. 

In an earlier interaction in December 2013, senior officials at DGCA had told Business Standard that the process of granting an AOP to AirAsia was "happening on a fast-track basis" and that the airline will receive its permit soon after a DGCA team certifies training facilities for crew in Malaysia in January.

AirAsia India had applied to the DGCA for AOP in October 2013, two weeks after it received the NOC from the civil aviation ministry. The procedure for award of AOP is being conducted in accordance with CAP3100, which involves a checklist of 36 items.

The DGCA grants the AOP after assessing the preparedness of a start-up airline to launch flights by examining issues like availability of aircraft, manpower to operate flights as well as on the ground, aircraft parking space at airports and engineering facilities.

After receiving the Air Operators Permit, AirAsia India will have to apply to airport operators and the DGCA for approval of its routes and network before officially launching the airline. 

In the meantime, AirAsia India has said in its statement of intent that the airline is looking at setting up line stations in 10 cities across southern and western India hinting at the airline's plans of developing probable route networks in the country.

Line stations are locations at which an airline carries out pre-departure/transit checks and weekly inspections. These inspections can be conducted in-house or be outsourced to a third-party (in event of which the airline would require approval from the DGCA).

The airline is looking at setting up line stations at Bengaluru, Trichy, Madurai, Coimbatore, Cochin, Hyderabad, Goa, Ahmedabad, Jaipur and Pune. 

Sources at DGCA informed that though the airline has indicated intentions to set up 10 line stations, it could opt for checks at 4-5 locations in the initial months of operation. AirAsia declined to comment.

AirAsia India is a joint venture between the Malaysian airline AirAsia (which would own 49 per cent stake), the Tatas (30 per cent) and the Telstra Tradeplace owned by Arun Bhatia (21 per cent).

The Tatas have also announced 51:49 venture with Singapore International Airlines to launch a full-service carrier in the country at an investment of $ 100 million. The airline plans to start services mid 2014.

AirAsia India would largely focus on markets in south India and move upwards upon development of low-cost terminals in metros such as Delhi and Mumbai. 

In a media briefing in Delhi in July last year AirAsia Chief Tony Fernandes had said, "As much as 50 per cent of air travel happens out of Delhi and Mumbai. When we start operations, this proportion would be redistributed as we will connect many new routes.

At the same time, we have requested the government to develop low-cost terminals in cities such as Delhi and Mumbai. London has four airports, New York has three airports. There is plenty of land available. When that happens we can look at these cities."

The airline also evinced interest in developing India as a hub for international travel. "India is strategically located. And we can operate flights from the southern part of the country within a four hour circle to destinations in Africa and on the Gulf route such as Doha, Nairobi, Maldives, Karachi, Bangladesh and some cities in China. It is bizarre that the government has a regulation in place which allows airlines with five years of operations and a fleet of 20 aircraft to fly international. It does not make sense. Probably Naresh (Goyal) or someone put it down", Fernandes had added.