Just when all the buzz was about the Air India vs Indigo fight for India’s booming civil aviation, AirAsia has made it clear that it is throwing its hat into the ring. Its aim? Take a big bite out of the booming outbound airline market from India.
On Monday afternoon, Thai AirAsia X, the long-haul wing of this poster boy of low-cost airline success, announced the launch of its flight from India’s busiest airport, Delhi’s Indira Gandhi International Airport to Bangkok in Thailand. However, a new flight launch is just the tip of AirAsia’s ambition, and strategy for India.
Going by the number of flights, AirAsia claims it is already the biggest international airliner in India (excluding domestic operators). Regarding the number of seats and profitability, longtime leader Emirates may still be on top, but not for too long if AirAsia has its way.
The secret sauce in AirAsia’s armour is three — one, its effective low-cost model, operating to smaller airports (it flies to Don Mueang in Bangkok, not the bigger Suvarnabhumi Airport where all other airlines from India fly to) saving on airport rental. It also offers down-to-earth fares, based on the smart marketing ploy of “if you don’t use it, don’t pay for it”, which sounds a lot better than saying ‘pay for everything from baggage to seat selection to food and drinks.’
Second, is the India-ASEAN free trade agreement from the 2010s which allows Thai airlines to fly to secondary airports in India without any need for bilateral agreements. While metro airports can be operated only based on bilaterals (a sort of quid pro quo decision between two countries while allowing flights between them), most others are free for the taking, something AirAsia has capitalised on beautifully, operating multiple flights to places like Bengaluru, Kochi etc. For example, in both these cities, more than one AirAsia subsidiary operates, thus giving more choices to passengers.
And third, is the plethora of onward connections it offers Indian travellers through Bangkok’s Don Mueang (or other hubs in its larger umbrella network) to the rest of South East Asia and all the way up to China, Japan and Australia.
Airline officials say as much as around 20% of travellers on any international flights are transit passengers headed to further destinations, a lucrative proposition for AirAsia, considering the cost consciousness of Indian travellers and how the airline is well placed to capitalise on it.
Tassapon Bijleveld, CEO of Thai AirAsia X said, “(AirAsia) continue to strengthen our presence whilst improving affordable connectivity across the region. “We are seeing rising demand in the international sector, supported by measures like visa-free entry, which have made travel more accessible and cost-effective.”
It is actually the complex ownership and subsidiary formulation of parent company Malaysia’s AirAsia, founded by Indian-origin Tony Fernandes, that makes it extra effective. Just like AirAsia India was a joint venture in India with Tata Group (recently subsumed into Air India Express), AirAsia Berhad, the parent company in Malaysia, has several other subsidiaries — like PT AirAsia Indonesia, Philippines AirAsia, Thai AirAsia etc etc., the last one a joint venture with Thailand’s flagship carrier Thai Airways.
The group also operates longer-distance flights (what it classifies as any flight longer than four-and-a-half hours) under another subsidiary called AirAsia X. All this means the company can offer multiple options and seamless flight operations from many Indian cities to various international destinations in Southeast Asia wherever it has subsidiaries, unlike other international airlines like Emirates who can only fly to Dubai from Indian cities as per norms.