Sunday, March 10, 2013

Long, Turbulent Flight Ahead for AirAsia in India

AirAsia could face a host of bureaucratic obstables to its flying plans in India as a miffed civil aviation ministry may cite the airline's losses on South-east Asian routes and lack of airport in India to delay or even deny key permissions.

Some of the country's leading airlines have also indicated their opposition to AirAisa's aircraft purchase programme, saying they could lobby with the ministry  to scuttle the purchases if they are large in number.

AirAsia, the hugely successful low-fare airlines promoted by Malaysian billionaire tony Fernandes, needs a raft of clearances from the governemnet,including a flying licence or  what is called in industry parlance an 'air operating permit'. It also needs basic infrastructure at airports, including parking bays, landing slots etc. and a no-objection certificate (NOC) from the ministry.

Last month, the airline formed a JV with the Tata Group and relatives of steel baron LN Mittal to launch a new budget airline in India's already crowded aviation market. The JV, where AirAsia will hold 49% received clearance from the Foreign Investment Promotion Board despite opposition from the Indian aviation ministry.

Aviation ministry officials, already upset over the way AirAsia entered the country through a joint venture with the Tatas, may ask tough questions and cite external facctors such as the parent's performance in other coutnr, people close to the situation said.

The airline first needs an NOC from the civil aviation ministry before it can apply for an air oprating permit, a ministry official could arise as one of the key conditions necessary for the grant of an NOC is the health of the industry and its key players.

Source: The Economic Times | Friday 08th  March 2013

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