AirAsia revives plans for Singapore-based affiliate

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AirAsia looks set to revive its plans to set up an airline in Singapore, and could invest in an Indian carrier if the "environment" changes in that country.

The Malaysian low-cost carrier has applied several times for a Singapore Air Operators' Certificate (AOC), but has been consistently rebuffed.

However AirAsia group chief executive Tony Fernandes remains undeterred, and says in an interview with Flightglobal that he "would love" to be granted an AOC.

"We're optimistic, but it took me seven years alone to get Kuala-Lumpur-Singapore as a route," he says at an interview in Toulouse last week.

Singapore has become a "virtual" hub for the airline, given the extensive operations to its Changi airport from AirAsia's Malaysian, Thai and Indonesian carriers. Industry sources say that the airline has not made a fresh application for an AOC, but that could come as it assesses its operations into the country.

AirAsia appointed Logan Velaitham as its Singapore Country Head in early May, saying then that it retains an "unwavering focus on our vision to gain a bigger foothold" in the city.

Velaitham's mandate is to work with the Singapore government, and the airport and tourism agencies, to find out what would enable AirAsia to eventually get the AOC, add the sources.

Fernandes also says that AirAsia could invest in Indian carriers if the government goes ahead with plans to allow foreign direct investment from non-Indian airlines. The proposal has been mooted by the Indian civil aviation ministry, and put up to the cabinet for approval.

However, Fernandes cautions that the operating "environment must first be conducive" for investment, pointing out that Indian airlines are plagued by high airport and fuel charges and taxes and that the country suffers from a shortage of infrastructure.