AirAsiaâs entry into the Indian skies could shake up the established order
Any foreign investor entering the Indian civil aviation market will know the unwritten rule before making any public announcement of his intent: Always seek the blessings of the ministry beforehand. Jet Airways chairman Naresh Goyal and Etihad CEO James Hogan, both well-versed in the workings of the Indian system, did just that before their planned equity link-up. In late January, they did the rounds of the corridors of power—meeting not only the civil aviation minister Ajit Singh, but also the finance minister and the minister for trade and commerce for good measure.
On the other hand, Tony Fernandes, the feisty owner of AirAsia, has never believed in sticking to established rules. His stated philosophy has been about ‘controlled anarchy’—or unleashing the full creative energies of all his employees. That’s been at the core of his hugely successful strategy to disrupt the aviation market in Asia and helped him emerge as the largest low-cost player in this part of the world in less than a decade.
So it should have surprised no one when Fernandes suddenly announced his plan to launch a domestic airline in India, in partnership with the Tata group, all the way from his base in Kuala Lumpur. The mandarins at Rajiv Gandhi Bhavan, which houses the powerful ministry of civil aviation, were left completely stumped though. The next morning, minister Singh admitted to the morning papers that he had been kept completely in the dark.
Eventually, chairman emeritus of the Tata group Ratan Tata met Singh in the last week of February to possibly make sure the path is smooth. Tata, a keen aviator, is reportedly eager to see that the airline gets off the ground. In a conference call with journalists after the deal was announced, Fernandes joked that he was trying to get Tata to start flying the A320s, but was afraid that he may charge too much!
The Indian establishment seldom takes kindly to an iconoclast. But one thing is clear: None of his rivals are likely to underestimate Fernandes and his latest venture, AirAsia India. Most experts reckon that his entry into the Indian civil aviation market could shake up the established order.
(This story appears in the 22 March, 2013 issue of Forbes India. To visit our Archives, click here.)