AirAsia co-founder Tony Fernandes has ruled out a return to India's domestic aviation market, saying the country is already well served by airlines. However, he said India remains an important market for the company, which currently flies to 20 destinations in the country. Speaking to Rakesh Kumar on the sidelines of the fourth edition of the Gateway Gulf event in Bahrain, where AirAsia announced its entry into the Bahrain market, Fernandes told the move would further strengthen the airline’s links with India. He also spoke about rising fuel costs, higher airfares and the future of low-cost air travel.
You entered the Indian market and eventually exited airline business in the country. How was that experience?
Oh, wow! At that point, I did not think we had the financial strength to achieve what we wanted. The political environment was challenging and, to be honest, the aviation industry was tough for us.
Eventually, we sold the airline to our partner, the Tata Group, and they are taking it forward.
But we are still very much present in the Indian market. India is a well-served market. It does not necessarily need AirAsia domestically. There are IndiGo, SpiceJet and several other airlines operating there.
However, we still fly to 20 destinations in India, and it is a very important market for us. If we enter Bahrain, that will give us another reason to strengthen our connections with India. India is extremely important to us.
Do you have any plans to re-enter India's domestic aviation market?
No, zero. I have done it. Been there. Maybe the next leader can do it, but not me. I will stick to ASEAN.
You have built your business around affordable air travel. But with fuel prices increasing, ticket prices have also gone up. How do you see this?
It is inevitable. When I started this business, oil was about $30 a barrel. Prices have steadily increased. But I still think airlines offer very good value when you compare them with other forms of transport, such as road travel and trains, or even the cost of hotels.
There is still a lot of value in air travel, and the demand reflects that. Despite ticket prices going up, our demand remains very strong. I think airlines globally still offer a very good-value product. Of course, flying is more expensive than it used to be, but compared with other options, it remains quite affordable.
Do you think there is still room for cheaper airlines to operate profitably?
I think so. Between IndiGo, ourselves and the Lion Group, we are all relatively cheaper compared with full-service airlines. But when you factor in oil prices, it is a different story.
