Fliers cheer, rivals frown as AirAsia makes a splash | business | Hindustan Times
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Fliers cheer, rivals frown as AirAsia makes a splash

business Updated: Jun 01, 2014 23:35 IST
Tushar Srivastava
Tushar Srivastava
Hindustan Times

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.