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AirAsia focused on lowest fares and improving connectivity in India

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Tony Fernandes

The recent AirAsia press meet in Mumbai saw Tony Fernandes, Group CEO, AirAsia disclose what he calls his ‘simple game plan in India’ – lowest fares and improving connectivity within the country. He pointed out that many airports are under utilised. The key is getting the market stimulated by reduction of prices. “We will be aggressive probably more than any other airline. There are many routes that are not covered. Connectivity is not about one flight but having ten flights in a day. There will be a lot of things we will be looking at differently,” he asserted.

Fernandes believes that it is a mistake to treat India as one country. “We will grow in one part and then grow in other regions,” he added. The initial focus being south India, with headquarters in Chennai. “We will bring ASEAN and India much closer. India will become a big hub for us,” he stated.

He remarked that there are two factors – revenue strategy and cost strategy – both the structures should be right. It ultimately comes down to the cost structure. “Unbundling is the right way to go, we want to give the lowest possible fares – there are many options that people do not want and so they do not have to pay for it. Similarly it is with bags. We give the common man the chance to fly without having to pay for what he does not want,” added Fernandes.

AirAsia has focused strongly on ticket sales through its website, however a large percentage of air ticket sales in India is done through travel agents. Talking about sales and distribution Fernandes stated, “When we started AirAsia in Malaysia there was no internet. We drove internet sales but never closed other channels like travel agents. In Indonesia we have many travel agents. But we drive people to go to the internet. E-commerce is big in India.”

Fernandes is optimistic about the immense potential of the market of 1.2 billion people. One of the reasons for his optimism is the quality of workforce available here. “India is blessed with smart people. People are key for this airline,” he said. He averred that hiring of Mittu Chandilya, CEO, AirAia (India) has surprised many people as Chandilya is not from an airline background. “I wanted someone to come in with a different view. If Mittu was from an airline I would not have hired him,” he stated. Most of the second level team in India has also been hired.

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