Low-cost carrier (LCC), AirAsia India has categorically denied market speculations that the carrier is planning to exit the Indian domestic and international operations.
In a written communication to the Travel Agents Association of India (TAAI) to clarify its stand, AirAsia stressed that it will continue to grow its network and scale of operations in the Indian market. The senior management of AirAsia India, led by their Chief Commercial Officer (CCO), Ankur Garg, Chief of Sales, Ajay Kumar Wadhawan and other team members connected with the association on a virtual meeting and assured on the stability of the airlines and provided insight into their expansion and upcoming schedules.
“While the current pandemic has severely impacted the aviation sector and AirAsia India is no exception, we have remained adequately capitalized throughout these months by securing the funding from our majority shareholder as and when required,” said Garg.
As per an aviation insider, the Tata group is expected to provide around $50 million in emergency funding to keep its budget airline joint venture (JV) in India with Malaysia’s AirAsia Group Bhd afloat. The fund infusion through a mix of debt and equity could see the Tata group’s stake in Air Asia India Ltd exceed beyond the current 51 percent.
According to the airline, it is already operating at 55% of its pre-covid capacity and looking to increase it further to 70% of pre-covid level in the wake of the relaxed capacity mandate from the government. AirAsia India has added a brand new A320 NEO to its fleet in October and is looking to add four similar aircraft to its fleet in the near future.
“Another evidence of the financial stability of AirAsia India is that we have been smoothly processing all refunds in the last few months and never forced conversion of bookings during lockdown to “credit shells”. You may recall in the months of Sep-Oct, our leadership proactively engaged in regional meetings with travel agent partners across the entire country and addressed any questions on refunds, long-term growth plans and other queries,” said Garg in its communication to TAAI.
On the employee front, the airline has not retrenched any staff and has not resorted to salary cuts for employees drawing a salary of less than Rs 50,000 per month.
AirAsia Group, which owns a 49% stake in AirAsia India, last week said it is evaluating its money-losing airline joint venture in India with Tata Sons Ltd in the wake of the losses caused due to the coronavirus pandemic, the Mint reported.
“Our businesses in Japan and India have been draining cash, causing the group much financial stress. Cost containment and reducing cash burns remain key priorities evident by the recent closure of AirAsia Japan and an ongoing review of our investment in AirAsia India,” AirAsia Bhd said in a statement last week.