Any foreign investor entering the Indian civil aviation market will know the unwritten rule before making any public announcement of his intent: Always seek the blessings of the ministry beforehand. Jet Airways chairman Naresh Goyal and Etihad CEO James Hogan, both well-versed in the workings of the Indian system, did just that before their planned equity link-up. In late January, they did the rounds of the corridors of power—meeting not only the civil aviation minister Ajit Singh, but also the finance minister and the minister for trade and commerce for good measure.
On the other hand, Tony Fernandes, the feisty owner of AirAsia, has never believed in sticking to established rules. His stated philosophy has been about ‘controlled anarchy’—or unleashing the full creative energies of all his employees. That’s been at the core of his hugely successful strategy to disrupt the aviation market in Asia and helped him emerge as the largest low-cost player in this part of the world in less than a decade.
So it should have surprised no one when Fernandes suddenly announced his plan to launch a domestic airline in India, in partnership with the Tata group, all the way from his base in Kuala Lumpur. The mandarins at Rajiv Gandhi Bhavan, which houses the powerful ministry of civil aviation, were left completely stumped though. The next morning, minister Singh admitted to the morning papers that he had been kept completely in the dark.
Eventually, chairman emeritus of the Tata group Ratan Tata met Singh in the last week of February to possibly make sure the path is smooth. Tata, a keen aviator, is reportedly eager to see that the airline gets off the ground. In a conference call with journalists after the deal was announced, Fernandes joked that he was trying to get Tata to start flying the A320s, but was afraid that he may charge too much!
The Indian establishment seldom takes kindly to an iconoclast. But one thing is clear: None of his rivals are likely to underestimate Fernandes and his latest venture, AirAsia India. Most experts reckon that his entry into the Indian civil aviation market could shake up the established order.
(This story appears in the 22 March, 2013 issue of Forbes India. To visit our Archives, click here.)
sir it is good that airasia is cmng to indian domestic market with tatas. this will improve the quality of services and price for flying. the other airlines might be threghten with compitition is wrong. not like the other airlines to have the colobration comes in profit overnight. to do business in india u have to be regular in everything.
on Mar 9, 2013Air Asia is all set to truly disrupt the business, models and the sector, for sure in India....perhaps its a dream come true to the Original Indian LCC propnent: Capt. Gopinath. Perhaps its a travesty of sorts for KF to look haplessely at such phenomenon. But then employees of KF may be the most exhilarated ones at the advent of Air Asia in India
on Mar 8, 2013Spot on! I am sure there would definitely be more articles linked to Air Asia, LCC and India. As I had mentioned to you, discipline is much required in aviation and it has direct bearing on cost. Indigo was able to attract business customers primarily on plank of being on-time. By discipline I mean people being on time else pay for services. Air Asia has mostly self check-in kiosks and they work pretty well if a passenger is on time. Most of us do not need 3 people to issue the boarding pass ( that is currently the case). Recently some friends were travelling to Italy via London from Delhi. They were so scared of being charged for excess baggage on their London-Naples flight by Ryan Air that they actually posted some stuff. Meanwhile they were least bothered about the Delhi-London flight. It would be great to see Air Asia operate here, I foresee culturally it fits well with the average India who wants to travel cheap, often, and not too far. My first reaction to Ratan Tata\'s tweet announcing the JV was this would be a threat to railways! This again comes from first hand experience, flown Langkawi-KL for Rs. 750!
on Mar 8, 2013Thanks Vaibhav. There is really very little difference between the FCC and the LCC products in the Indian skies today- apart from free food served by the former. The fares are very close and there\'s not too much difference in the inflight experience. The only concern is that Fernandes and co may not be allowed to make the changes that are necessary to bring fares down.
on Mar 8, 2013The question of Air Asia disrupting the Indian aviation does not arise. Indian aviation is already in disrupted mode.
on Mar 8, 2013Excellent comment.
on Mar 10, 2013