| AirAsia India will break even with 57-58% loads, according to its group chief executive officer Tony Fernandes "Once we have a stable cost structure that is after seven-eight planes we will break even with 57-58% occupancy," Fernandes said here on Monday. To put it in perspective this is about half the number of passengers Jet Airways required to recover cost in last quarter of FY 2013. AirAsia follows a strict cost control structure across its network and will replicate it here. It has said it will start with three planes later this year and will add an aircraft every month. Fernandes said he expects ancillary income to contribute as much as it does in Malaysia. Like other airlines in India it will offer 15 kgs of free luggage on domestic routes. In Malaysia, AirAsia earns about 18% of all its revenue from ancillary sources. ALSO READ: AirAsia to start Madurai-Kuala Lumpur flights "I am not going to reveal everything about ancillary revenue. We own our planes and owning aircraft is cheaper than leasing. They (IndiGo) are a good airline but this is not a zero sum game,'' Fernandes said responding to queries on challenges from other low cost airlines like IndiGo. AirAsia group will be leasing planes from its fleet to its Indian subsidiary at cost basis. "India has a population of 1.2 billion. We are not here to take any one's market share. We are here to grow the market. People doubted us when we started a flight from Kuala Lumpur to Trichy and now we have three daily flights. We are adding a flight to Madurai,'' he added. He said AirAsia will match its sales and distribution strategy in India as per the market requirements and will drive to encourage web sales. As much as 80% of AirAsia's bookings happen on its website while India an identical number uses travel agents for bookings. "We keep receiving requests portals like MakeMyTrip but we have a special partnership with Expedia,'' he said without divulging more details. Fernandes and his deputy CEO Kamarudin Meranun are in India to interact with their India team, stake holders and government officials. On Monday they will meet Ratan Tata and Tata group chairman Cyrus Mistry and on Tuesday will meet civil aviation minister Ajit Singh. Fernandes who just snapped his ties with All Nippon Airways and pulled out of a low cost airline in Japan admits there is a burden to succeed in India. "It has been struggle for us in Malaysia. It will be a struggle for us here. There is no guarantee of success..... We can't change the market overnight but we will go for it,'' Fernandes said. Also post AirAsia Japan fiasco, Fernandes has decided not to partner with another full service airline. He also added that he believes in organic growth and sees mergers and acquisitions as value destroyers. Fernandes says he has hired the second rung for the airline in India. So far the airline has recruited 50 employees and pilots and cabin crew for its launch. Fernandes denied that he had hired pilots from IndiGo and said he will pay as per prevailing market conditions. I am concerned about cost management, says AirAsia's India CEO "There are lot of challenges but we are focussed on opportunities. The challenges are mostly internal. I am focussed about cost management and hope to get it right,'' said Mittu Chandilya. Chandilya, who worked AiAsia India plans to launch operations from end of this year but is yet to receive a no objection certificate and permit from the government. It plans to add ten planes over next year and will focus mainly on South India before expanding to other parts. "We will bring India-South East Asia closer. Business between the two regions will expand and small and medium enterprises will benefit. India will become an important hub for us,'' Fernandes.  via Business - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNGg9xBO4Kr_IBWqykDugmwlPBCgJw&url=http://www.business-standard.com/article/companies/airasia-india-hopes-to-break-even-in-a-year-113070100380_1.html | |||
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