HindustanTimes Sat,27 Dec 2014

Fliers cheer, rivals frown as AirAsia makes a splash

Tushar Srivastava, Hindustan Times  New Delhi, June 01, 2014
First Published: 23:23 IST(1/6/2014) | Last Updated: 23:35 IST(1/6/2014)

AirAsia India’s entry into the domestic aviation market has brought cheer to the passengers and has left the competitors frowning.

Operating only on two sectors to start with — Bangalore-Goa and Bangalore-Chennai — AirAsia India has managed to create a splash with its Rs. 5 promotional fares.

Adding airport taxes and fees, the promo Bangalore-Goa ticket cost Rs. 490, Goa-Bangalore ticket cost Rs. 291, Bangalore-Chennai Rs. 490 and Chennai-Bangalore Rs. 339.

It prompted an immediate response from market leader IndiGo, which launched its own promotional offer of Re 1 tickets on the same sectors.

“AirAsia was expected to unleash a price war offering ‘the lowest of low fares’ and it has done exactly that,” said Rajan Sehgal, director, Arrivals Air Service Pvt Ltd. “Other Indian carriers who are neck-deep in losses will be forced to match fares in a high-cost operating environment.”

Clearly, the start-up has ruffled feathers. “What is predatory, disruptive, dangerous? Offering Rs. 5 fares in peak season, and that too w/in 14 days of travel. Let us wait and watch...” tweeted SpiceJet COO Sanjiv Kapoor.

“Anybody who says he is not worried about AirAsia’s entry would be lying,” said a senior executive of a rival airline.

The passenger, however, is happy. “I am waiting for it (AirAsia) to launch flights on other sectors. The rising airfares are a direct result of the demand-supply mismatch and with a new entrant, having both deep pockets and access to best technology, there should be a considerable drop in fares,” said Rajesh Bhargava, a frequent flyer.

Even besides the Rs. 5 promo offer, there has been a considerable drop in fares on the sectors AirAsia India will operate.

A search on travel portal MakeMyTrip revealed that the cheapest available ticket on the Bangalore-Goa sector from June 1 to June 11 on Saturday cost Rs. 4,745 but post June 12, when AirAsia launches operations, tickets were available for as less Rs. 1,499 on rival carriers.

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