AirAsia India started making money in December: Tony Fernandes

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Hyderabad: Many Goans leave their seaside state for prosperous Europe, but there is one with Goan roots who wants to be Indian again—Tony Fernandes.

The founder of AirAsia Group, whose father is of Goan origin, on Tuesday said he applied to be an Overseas Citizen of India (OCI) a week ago. Fernandes, whose airline is a minority shareholder in AirAsia India, is seeking to sidestep criticism that the airline is controlled from abroad, which would be a breach of rules.

Indian laws allow a foreign company to own up to 49% in an airline. It also allows foreign airlines to invest up to 49% in an Indian airline. A non-resident Indian (NRI) is allowed to hold 100% in an airline.

“I was searching for my father’s passport,” said Fernandes, who is in Hyderabad for the fifth edition of the Indian Aviation show.

Once he gets OCI status, nobody can hound him over foreign ownership, Fernandes said. “May be I should throw a party in Goa after I get the citizenship,” Fernandes joked.

He pointed out that Jet Airways (India) Ltd chairman Naresh Goyal despite living in London, is able to step aside regulations. In February, Fernandes had raked a fresh controversy by asking whether all promoters of domestic airlines are living in India, hinting at Goyal.

Goyal, founder of India’s largest airline by passengers carried, is a London-based non-resident Indian (NRI).

A week after Tata Sons Ltd chairman emeritus Ratan Tata, in a tweet, favoured waiver of the so-called 5/20 rule, Fernandes said: “Quite crazy 5/20 hasn’t been solved. Are owners of Indian airlines living in India. Naresh (Goyal)? NRI.”

AirAsia Group is very bullish about India, Fernandes said, irrespective of the country’s 5/20 rule.

He said the Indian unit started making money in December, pointing to his focus on profitable domestic operations rather than waiting for the controversial 5/20 rule to go.

Under the so-called 5/20 rule, new airlines—including Vistara and AirAsia India, both co-owned by Tata group—must fly local for five years and secure 20 aircraft before venturing abroad.

Vistara, which is run by Tata SIA Airlines Ltd, completed one year of operations in January, while AirAsia India will complete two years in operations shortly.

AirAsia India is a joint venture in which AirAsia Bhd holds 49%, Tata Sons Ltd 41% and Arun Bhatia of Telestra Tradeplace Pvt. Ltd the rest.

Fernandes said AirAsia India will induct two more aircraft in three to four months.

Losses at AirAsia India narrowed to Rs.25.65 crore in the December quarter fromRs.61.15 crore in the preceding three months on the back of an increase in average fares and ancillary revenue, the local unit of Malaysia’s AirAsia Bhd said last month.

AirAsia India recorded a 232% increase in revenue to Rs.208 crore and saw strong capacity growth of 133% year-on-year (YoY), AirAsia said in a statement.

Average fares increased by 12% to Rs.3,626 while ancillary revenue per passenger grew by 133% to Rs.492.

AirAsia India’s managing director and chief executive officer Mittu Chandilya is reported to have resigned early last month. AirAsia Group is yet to confirm the development.

AirAsia India started operations on 12 June 2014 with a single Airbus A320 aircraft. Since then it has grown its fleet to five and flies to 10 destinations in India. It has now carried more than a million passengers.

AirAsia India is yet to make profit. In October, Chandilya told Tata Review, the Tata group’s internal publication, that AirAsia India needs to have eight aircraft to be profitable.

The airline has about 2% market share.

Mittu Chandilya, chief executive officer at AirAsia India said that the Indian unit has made gross profit at three consecutive months starting December to February.

Hyderabad: Many Goans leave their seaside state for prosperous Europe, but there is one with Goan roots who wants to be Indian again—Tony Fernandes.

The founder of AirAsia Group, whose father is of Goan origin, on Tuesday said he applied to be an Overseas Citizen of India (OCI) a week ago. Fernandes, whose airline is a minority shareholder in AirAsia India, is seeking to sidestep criticism that the airline is controlled from abroad, which would be a breach of rules.

Indian laws allow a foreign company to own up to 49% in an airline. It also allows foreign airlines to invest up to 49% in an Indian airline. A non-resident Indian (NRI) is allowed to hold 100% in an airline.

“I was searching for my father’s passport,” said Fernandes, who is in Hyderabad for the fifth edition of the Indian Aviation show.

Once he gets OCI status, nobody can hound him over foreign ownership, Fernandes said. “May be I should throw a party in Goa after I get the citizenship,” Fernandes joked.

He pointed out that Jet Airways (India) Ltd chairman Naresh Goyal despite living in London, is able to step aside regulations. In February, Fernandes had raked a fresh controversy by asking whether all promoters of domestic airlines are living in India, hinting at Goyal.

Goyal, founder of India’s largest airline by passengers carried, is a London-based non-resident Indian (NRI).

A week after Tata Sons Ltd chairman emeritus Ratan Tata, in a tweet, favoured waiver of the so-called 5/20 rule, Fernandes said: “Quite crazy 5/20 hasn’t been solved. Are owners of Indian airlines living in India. Naresh (Goyal)? NRI.”

AirAsia Group is very bullish about India, Fernandes said, irrespective of the country’s 5/20 rule.

He said the Indian unit started making money in December, pointing to his focus on profitable domestic operations rather than waiting for the controversial 5/20 rule to go.

Under the so-called 5/20 rule, new airlines—including Vistara and AirAsia India, both co-owned by Tata group—must fly local for five years and secure 20 aircraft before venturing abroad.

Vistara, which is run by Tata SIA Airlines Ltd, completed one year of operations in January, while AirAsia India will complete two years in operations shortly.

AirAsia India is a joint venture in which AirAsia Bhd holds 49%, Tata Sons Ltd 41% and Arun Bhatia of Telestra Tradeplace Pvt. Ltd the rest.

Fernandes said AirAsia India will induct two more aircraft in three to four months.

Losses at AirAsia India narrowed to Rs.25.65 crore in the December quarter fromRs.61.15 crore in the preceding three months on the back of an increase in average fares and ancillary revenue, the local unit of Malaysia’s AirAsia Bhd said last month.

AirAsia India recorded a 232% increase in revenue to Rs.208 crore and saw strong capacity growth of 133% year-on-year (YoY), AirAsia said in a statement.

Average fares increased by 12% to Rs.3,626 while ancillary revenue per passenger grew by 133% to Rs.492.

AirAsia India’s managing director and chief executive officer Mittu Chandilya is reported to have resigned early last month. AirAsia Group is yet to confirm the development.

AirAsia India started operations on 12 June 2014 with a single Airbus A320 aircraft. Since then it has grown its fleet to five and flies to 10 destinations in India. It has now carried more than a million passengers.

AirAsia India is yet to make profit. In October, Chandilya told Tata Review, the Tata group’s internal publication, that AirAsia India needs to have eight aircraft to be profitable.

The airline has about 2% market share.

Mittu Chandilya, chief executive officer at AirAsia India said that the Indian unit has made gross profit at three consecutive months starting December to February.