AirAsia India set to trigger price war

Courtesy AFP

Courtesy AFP

INDIA’s first carrier with foreign investment – AirAsia India – commences operations today. Owned by Malaysia-based AirAsia and India’s TATA Group, the new budget airline is likely to trigger a price war among the domestic operators.

But AirAsia is confident that it has the discipline to keep its fares low and its costs “razor-thin”, so said chief executive Mittu Chandilya. The airline has promised the lowest fare, flying between Bangalore and Goa for as low as US$17 which is cheaper than a second-class train fare

Anything goes, it seems, in India. Many carriers have come and gone, and many of the existing operators continue to incur losses. Yet the huge potential of a growing market continues to lure new investors hoping to make it big in the arena.

For now, AirAsia chairman Tony Fernandes is probably pleased that AirAsia India has beaten Singapore Airlines (SIA) to the starting line in launching AirAsia India, which is 49-per-cent owned by AirAsia. In an almost similar arrangement, SIA has also partnered TATA Group to establish TATA SIA Airlines to be launched in October. Any apparent competition between the two upstarts can only benefit TATA whichever way it swings, and, of course, the consumer as the plethora of operators undercut each other.

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About Dingzi
Writer by passion, with professional expertise in aviation, customer service and creative writing. Aviation veteran, author, editor and management consultant. Besides commentary on business issues and life-interest topics, travel stories and book reviews, genres include fiction, poetry and plays. Nature lover who abhors cruelty of any form to animals, and a tireless traveler. Above all, a dreamer.

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