AirAsia plans to wait it out before breaking even its cost-benefit.
The head of the investor relations at AirAsia India said that it does not have any chance of breaking even before at least eight months in 2014. The airline has further pushed its earlier four month break-even target. Benyamin Bin Ismail said, in the first four months the airline will try “building its brand” while offering low fares and getting traffic on its flights.
Air India had launched its first flight in June, 2014 from Bengaluru to Chennai and Goa at staggeringly low prices such as Rs. 490 and Rs. 990. The prices were hardly enough to cover the costs of the airline, however, the Malaysian based low-cost carrier had gone ahead and launched flights to more Indian destinations such as Kochi.
CEO Mittu Chandilya said that it aims to break even in four months after it achieves some stability in terms of market performance.
Ismail added that the Bengaluru and Goa flights are running full, while the flights to Kochi have reached an occupancy rate of 80%. The airline has been primarily marketing itself as a pan India carrier and Ismail added that it will apply for international operations as soon as the Indian rules and regulations go lax on its aviation norms.
Indian rules dictate that Indian carriers need to fly domestic routes for a minimum of 5 years and must have at least 20 planes in their fleet before they can consider to operate overseas flights.
Photo Credits: Hindu businessline