Air Asia’s Foray into Korea Makes Local Airlines Nervous

16 December 2013

 

Asia’s lowest-cost airline, Air Asia, is planning to launch its own subsidiary in Korea.

According to the Ministry of Land, Infrastructure and Transport (MLIT) and aviation industry officials on November 15, Air Asia has begun the process of establishing a subsidiary company in Korea, to be named “Air Asia Korea,” with aid from both financial investors and strategic investors.

And it is also preparing to submit applications for air transport business in Korea to MLIT.

Initially Air Asia will operate a domestic route between Cheongju and Jeju, and has plans to apply for an international route in the future.

In November, Air Asia’s CEO Tony Fernandes came to visit MLIT to present Air Asia’s roadmap, outlining its plan of operation.

Curious onlookers are watching closely at how Air Asia will operate its subsidiary.

At the moment, there are two obstacles to Air Asia.

First, there is a “rule that forbids a foreigner and/or foreign company from owning more than 50 percent share of an airline,” and there is a second “rule that prevents a foreign company from owning an airline.”

Last year, Air Asia was unsuccessful in its attempt take over T’way Air, Korea’s low-cost airline, because of these rules and domestic airlines’ objections.

Currently, the MLIT is mulling over whether or not it should accept Air Asia’s application.

It matters this time once again whether or not Air Asia’s entry into the Korean market will disrupt the aviation business and bring about inroads into the local market against the law of aviation that MLIT created to protect the Korean air transport and logistics industry.
This move is threatening Korea’s air transport industry, in particular the fledgling low-cost airlines that have just begun their baby steps.

An official for a local low-cost airline said, “Unreasonable pricing will have detrimental effects on the market,” adding, “Heated competition will eventually jack up prices, hurting consumers.”
 

- See more at: http://www.businesskorea.co.kr/article/2458/low-cost-airliner-air-asia%E2%80%99s-foray-korea-makes-local-airlines-nervous#sthash.pXaZKMkl.dpuf

AirAsia India to spread wings wide by end of first year

http://www.business-standard.com/article/companies/airasia-india-to-spread-wings-wide-by-end-of-first-year-113121300831_1.html

AirAsia India to spread wings wide by end of first year

To import 10 Airbus A320s and account for 7% of total domestic LCC fleet

Aneesh Phadnis | Mumbai

December 14, 2013 Last Updated at 22:54 IST

Low-cost carrier (LCC) AirAsia India, which is expected to launch its domestic services in partnership with the Tatas in February next year, has secured permission to import 10 Airbus A320 aircraft in the first year of its operations — about seven per cent of the country’s total LCC capacity. This will make the Malaysian carrier’s first-year fleet bigger than those of most others in the segment.

Air Asia’s capacity share is based on the premise that other competing airlines would use their entire new capacity in the domestic skies, though that is highly unlikely.

At present, IndiGo, the largest Indian LCC, has a capacity to ferry 60,000 passengers a day. It is expected to add 12 aircraft next year to increase its overall capacity to 73,000 seats a day. Compared with this, according to aviation experts, Air Asia should be able to fly 11,000 passengers a day by the end of its first year. On an average, a single plane is used for six domestic flights a day. The number of flights depends on route distance.

A closer rival to AirAsia would be Go Air, which is expected to have an average seat capacity of 18,000 a day after it has inducted three aircraft over the next twelve months.

SpiceJet, too, is likely to add three more planes to fleet next year. Taking these aircraft into account, AirAsia’s capacity after a year would a fourth of SpiceJet’s. Kapil Kaul, CEO for South Asia at the Centre for Asia Pacific Aviation (Capa) said: “I expect AirAsia to have more aggressive expansion. The full impact of its operations will be visible from 2015, but much of that depends on when it receives clearance from DGCA (The Directorate General of Civil Aviation) and when it launches operations.”

At present, the total number of seats offered by IndiGo, GoAir, SpiceJet and JetKonnect stands at 127,000 a day. These four airlines will collectively add 18 to 20 aircraft to their fleet over the next twelve months. According to analysts, the number of daily seats could rise by 15,000 to 20,000 after capacity augmentation during the period. But, all the new planes brought by the airlines may not be for the domestic routes.

AirAsia India is a joint venture among AirAsia Berhad (49 per cent), the Tata group (30 per cent) and Telestra Tradeplace (20 per cent). The airline had received a clearance from the Foreign Investment Promotion Board in March and a no-objection clearance from the civil aviation ministry in September. But it can file its schedule and secure slots only after it has received DGCA approval.

Earlier this year AirAsia India had announced it would launch services with three-four Airbus A320 aircraft, with a hub in Chennai. It also said South India would be its focus market and it would skip “high cost” airports, including the Mumbai and Delhi ones. Last year, the Malaysian airline had withdrawn its Kuala Lumpur-Delhi and Kuala Lumpur-Mumbai flights, citing high costs.

AirAsia to take off in Indian skies by February

http://www.moneycontrol.com/news/business/airasia-to-take-offindian-skies-by-february_1007206.html

AirAsia's launch, which was supposed to take place in January has been delayed by a month as the Malaysian airline has been awaiting operator's permit from aviation regulator, DGCA.
The aviation ministry has allowed AirAsia to import aircraft, but the launch has been delayed by a month - the carrier will now take to the Indian skies by February next year, reports CNBC-TV18’s Shereen Bhan.

 AirAsia has now managed to get a no objection certificate (NOC) from civil aviation ministry for the acquisition of aircrafts, which means the Malaysian airline can start the process of importing aircraft into India. But even that process is going to be closely linked to AirAsia getting air operator's permit, as AirAsia is not keen to get the aircraft into India and have them sitting on the ground unless they have a license to fly. Both these issues will be linked closely to each other, but at least it is one step forward. They can start the process of acquisition of aircraft. In Phase-I, they are looking at getting in four aircrafts. They may stagger them, they may get two first and two later and then eventually the plan is to actually get an aircraft in a month. As far as the launch is concerned, they are still pending clearance as far as the directorate general of civil aviation (DGCA) is concerned, the air operating permit has not come in and so, the earlier launch date was the end of 2013, but that has now been pushed. According to sources, earlier deadline of January is likely to be missed and now they are working with end of February, but all of this depends on by when the regulatory clearances come in. As of now, AirAsia is hoping to launch in India by February end, so it is one step forward, but not really more certain in terms of being able to kick-start in India as yet.