| BANGALORE, July 3
BANGALORE, July 3 Malaysian-based budget carrier
AirAsia Bhd said on Thursday it expects its India unit
to break even in December, later than initially planned, after a
delay in plane deliveries and a plan to boost investment in the
The budget carrier, which launched its inaugural flight in
India last month, had said it would break even around October.
Breaking-even would make AirAsia India stand out from all
but one of India's big airlines, which have seen margins
squeezed due to high costs and low fares. Most carriers lose
cash at a rapid rate in a highly competitive market.
"We expected to have five planes before October; we are not
going to get five planes," AirAsia India Chief Executive Mittu
Chandilya told reporters in the southern city of Bangalore. He
did not elaborate on the reason for the delay.
Tony Fernandes, owner and CEO of AirAsia, told reporters
earlier that the airline would also invest more money in new
planes to raise its scale in India, meaning it would miss its
original October target for breaking even. He did not say how
many more planes AirAsia would buy or give a figure for the
AirAsia now plans to sell 3 or 4 of its aircraft across its
operations, down from the 12 it said it had wanted to sell in
May, because of the demand it sees in Malaysia and India,
AirAsia India, a three-way venture between the airline,
India's Tata Group and investment firm Telestra Tradeplace,
launched its debut flight on June 12.
The carrier will have to juggle some of the highest fuel
costs in the region, an array of local and national taxes, and
heavy price discounting by rivals desperate to win market share.
The fares price war is expected to intensify too, when
Singapore Airlines Ltd's joint venture with the Tata
Group starts flying in India later this year.
(Reporting by Mridhula Raghavan and Lehar Maan in BANGALORE;
Writing by Tommy Wilkes; Editing by Miral Fahmy)