India’s airline regulator has said it has no reason to deny AirAsia India an air operator’s permit. A committee that examined the criticism against the AirAsia India launch has found the objections to be without merit. The airline is planned as a joint venture between AirAsia Bhd and two Indian partners—the Tata group and Telstra Tradeplace. It is now likely to be granted permission to fly soon.
The Directorate General of Civil Aviation (DGCA) had received 18 objections saying the airline should not be allowed. Those objecting included the Federation of Indian Airlines and Inter-Globe Aviation Ltd., the holding company for India’s largest low-cost carrier IndiGo.
AirAsia India’s entry with ultra-low fares is likely to impact IndiGo’s market share. The startup has already appointed a CEO and has been waiting to launch for over a year.
In a statement that is being seen as very progressive, the committee said there is strong need for facilitating air traffic in India by encouraging existing airlines as well as allowing new entrants. It said the new airline will also bring operational efficiency and expertise in the existing airlines. Stiff competition and improved work culture can only be provided by introduction of new entrants.
AirAsia India had already cleared most of the other hurdles in 2013. In April last year, the Foreign Investment Promotion Board approved the $30 million deal to launch AirAsia India. The airline received a no objection certificate (NOC) from the Civil Aviation Ministry last year.