By the fourth quarter of 2013, AirAsia expects to start operation of its proposed low-cost airline in a joint venture with Tata Group and Arun Bhatia of Telestra Tradeplace.
As soon as the joint venture receives approval from the sectoral regulator, it would launch operation, AirAsia’s founder and group CEO Tony Fernandes said.
Fernandes, who plans to pump in $30-$60 million into the new venture, said AirAsia’s strong brand and distribution network would be a differentiator. Promising a “very competitive product,” he said the key weapon was cost.
He said he had a fantastic partner in the Tata Group and the Indian partners will handle the regulatory and other issues while AirAsia will concentrate on the operational part.
All the three entities plan to leverage on each other’s strength. It took three years of planning and finalising the right structure and partner before AirAsia finally took the decision (to enter the Indian market), Fernandes said.
AirAsia had looked at many airlines and their cost structures before deciding to go the organic way, he added.
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