Air Asia, the much talked about low cost airlines is all set to expand its fleet size to about eight and further later on to about 16 to 20 planes. This move comes days after a widespread criticsm was aimed at the ruling authorities which made it mandatory for the new airlines to follow the 5/20 rule.
The rule states that any new airline must have a 5 year of service period in serving the domestic circuit as well as a minimum fleet of 20 aircrafts to be able to operate on international routes in India. The rule will hit the likes of Air Asia the heaviest as their entire USP is based on promising dirt cheap international travel. Not just Air Asia, but the newly operational Vistara is also suffering because of the same rule.
The news of the fleet expansion was disclosed by the AirAsia Chief Tony Fernandes, who also confirmed further capital infusion in the airlines. He went on to appreciate the raw potential of India as a market for airlines by stating, "Let the market decide and where routes are needed to be subsidised, subsidise them. India is a huge country with a huge market and it has a massive potential".
Mr Fernandes though, was less than impressed with the fuel taxes and the airport costs in India hinting that they could prove to be a major block for new entrants. He said, "Your airports are very costly and your fuel taxes are one of the highest. Please make business easier to do".
http://www.gizmodo.in/indiamodo/Air-Asia-Set-To-Expand-Its-Fleet-Size/articleshow/51023991.cms
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