Opinion- AirAsia India’s Chennai Challenge

 Neelam Mathews

 April 22, 2013

Complications don’t go away in India- more so for late entrants like AirAsia India, likely to be faced by a flood of pain points. Tony Fernandes has time and again declared Chennai as its hub, but at AerospaceDiary, we won’t be surprised if this decision may need to be re-looked. Little wonder, the carrier has not approached the authorities for an NOC as yet.

As they say, never forget to look over your shoulder- there might be a competitor lurking there. In Chennai, where SpiceJet is safely enconsed with night parking for its six 737s and 4 Q400s using seven gates for their early morning flights and Indigo with five aircraft parked, possibly using the other two, and just 24 takeoffs and landings an hour, one wonders how the Asian giant will tap its early morning flight requirement with limited runway slots.

Horror stories are aplenty about the new large terminal referred to by an operator, as a “white elephant”, not helpful to a budget carrier. For instance, there is no inline screening for baggage before check-in, the baggage area in the basement with a steep ramp, requires specialized trolley tractors to pull the loads. We hear there is a tendency for the sole operator of the trolleys- Bhadra-to charge exhorbitant rates. The charges run into something like Rs 8600 per tractor per day plus the excruciating taxes, leaving no option for budget carriers that depend on outsourcing, but to pay. “For an airport planned for 23 million, even belts are few and it takes 20 minutes for bags to arrive...….God help them if it rains,” said a former AAI official.

With AAI now asking for royalty of 32.65% in South India and 36% in Western India on Ground Handling charges, low cost cannot be budget anymore! Add  to this, with every passenger charged Rs 50 for SITAs CUTE system installed even at smaller airports-of which AAI has revenue sharing- this is “becoming robbery in daylight,” an airline official tells AerospaceDiary.

So where will AirAsia India ultimately head to? Only Tony can tell and we can only hazard a guess. Could it be Bangalore, being a private company in a position to negotiate? Will be interesting to wait and watch on how low Bangalore can go given its high operating costs and the fact that it has approached AERA for UDF?

Time will tell us very soon.