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AirAsia India defers Delhi operations, expects break-even by May-June

AirAsia India chief executive Mittu Chandilya cited regulatory uncertainties as the reason for deferring its plans to fly to the national capital from February 16.

twitter-logoPTI | February 4, 2015 | Updated 15:09 IST
AirAsia India defers Delhi operations, expects break-even soon
(Photo: Reuters)

AirAsia India, the low fare airline, which had originally set a break-even deadline of November 2014, is expected to achieve the same by May-June when it hopes to introduce its sixth plane, chief executive Mittu Chandilya said in Mumbai on Tuesday.

The Bangalore-based airline also deferred its plans to fly to the national capital from February 16, citing regulatory uncertainties.

"We are already cash-flow positive. We are expecting to break even anywhere between May and June. AirAsia India will hit break-even the moment we hit the sixth plane," Chandilya told reporters on the sidelines of an industry meet organised by the industry body CAPA.

On the deferring of Delhi-entry, the executive said, "If the government relaxes the guidelines, it will allow me to restructure the flight schedules. I don't want to do a semi-soft launch in Delhi."

Currently, AirAsia, the newest low-cost carrier, flies three planes and the fourth would start flying over the next three weeks, Chandilya said. As part of the plan, the airline will start inducting one aircraft every month from March.

AirAsia India is a joint venture between AirAsia Group with 49 per cent stake, Tata Sons with 30 percent and Arun Bhatia's Telestra Tradeplace holding the rest.

Chandilya admitted that the break-even deadline was pushed back owing to various external factors, but did not elaborate. He said the airline had plans to take the delivery of four more planes in 2014 itself.

We are planning to take 10 more planes in 2015. The break-even could happen fast if we start flying to the capital city, the chief executive said.

Recently, the government proposed to replace the 5/20 rule, which makes it mandatory for airlines to have five years of domestic operations and a 20-aircraft fleet to become eligible for flying international.

On this Chandilya sounded unenthused and said it would be difficult for an airline to change the schedule if the government changes international flying norms. However, he added that his airline was keen on flying international routes and it is not ideal to open a route and pulled out later to comply with a new flying strategy.

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