Malaysian budget airline AirAsia said on Tuesday it will not buy a stake in an Indian carrier for now but will fly to more cities in the country, outlining its plan two years after the group exited AirAsia India by selling its entire stake to Tata Group-owned Air India.
“Currently, we are not in talks with any other airlines in India. We are not looking at anything in India. It was a strategic decision to divest in India. We are concentrating on our core area, which is ASEAN (Association of Southeast Asian Nations). We want to focus in this area, launching more flights in the region and connecting to other countries like India from ASEAN,” said Kesavan Sivanandam, chief airport and customer experience officer of AirAsia, responding to a question by Business Standard at an event in Chennai.
AirAsia is the thirteenth largest airline in the world and flies to 14 Indian cities from Kuala Lumpur and Bangkok. “We are looking at Tier-II and Tier-III cities now (in India). From 14 cities now, we want to expand to 20 cities by the end of 2024,” said Sivanandam. The Indian market contributes around 18 per cent to the company’s revenue. AirAsia flights from India have a load factor of 90 per cent, referring to an industry metric of the percentage of available seats that are filled by passengers.
“We have plans to start in Bhubaneswar, Ahmedabad and Visakhapatnam in three months. Once we go to these cities, the only places with bilateral rights are Patna and Calicut. Anything beyond this, our hands are tight now,” he said. When two countries enter into bilateral rights, respective airlines are granted a fixed number of seats or flights that an airline can operate from various cities.
AirAsia has a market share of 51 per cent between India and Malaysia. Around 587,000 Indians travelled to Malaysia till last November. With Malaysia allowing Indians visa-free entry till December 2024, the number is expected to cross 700,000. Indian visitors stay in Malaysia for around six to seven days, according to official sources. The airline has placed orders for 650 new planes, which will be delivered by the end of this year.
