Sanjiv Kapoor says costs are similar for all carriers here
Barely a month before AirAsia India finally takes off, the air is thick with barbs and potshots. Three days after Tony Fernandes took a potshot at India’s biggest carrier IndiGo on Twitter, the chief of AirAsia’s other Indian rival criticised its lowfare model saying it won’t work in the face of high costs in India. Sanjiv Kapoor, COO of SpiceJet said AirAsia’s low-cost model won’t work in India in the face of high costs. “There is one way to offer fares lower by 30-35% than market rates; that is to have a 30-35% lower cost structure. Given fuel and other costs are similar for all players in India, that kind of cost advantage can only come from lower aircraft and asset costs. You can have that kind of cost advantage if, maybe, part of your costs are reflected in Kuala Lumpur and not in India,” Kapoor told reporters in a press conference in Delhi. Kapoor was referring to a recent claim from AirAsia India CEO Mittu Chandilya. Indian carriers are bleeding from high input costs, primarily fuel prices, borrowing rates and dollar-denominated purchases. AirAsia, known for its aggressive pricing the world over, is likely to start local India services in June, after crossing a spate of hurdles which included furious lobbying from local carriers. Many believe the mind games and cross-firing of words are setting the stage for a furious battle in the skies. On Tuesday, AirAsia chief Tony Fernandes directly pointed towards IndiGo, the country’s top carrier by market share, saying whatever the carrier tried to do to stop his (Tony’s) airline just made it “stronger and smarter”. Earlier, he had tweeted a photo of IndiGo owner Rahul Bhatia, whom he met at an event, jocularly drawing inferences from a boxing match. IndiGo has never responded publicly. But Chandilya and Kapoor have indulged in Twitter banter. On the entry of AirAsia India’s first registered aircraft into Chennai in March, Chandilya pointed out that the planes have leather seats. Kapoor, who follows Chandilya on the micro blog, quipped the Indian low-fare carrier too, has all leather covers in its seats. Chandilya was quick to counter “On the leather seats, you mean to say let’s not make a song & dance about it” in a thinly-veiled reference to SpiceJet’s recent trouble with the country’s aviation regulator after its crew decided to give an in-flight dance performance for its passengers. Kapoor caught on with a “touche!” but said he suspected “AirAsia, too, will be singing a different tune in India too now when hosting in-flight parties!”
Also, in a recent interview to ET, Chandilya said SpiceJet had “to do a lot of work to clean up what they are running”. The carrier recently posted a record annual loss of .` 1,003 crore, hurt by high input costs, a weaker rupee, slow demand and tough competition. Earlier in the day, SpiceJet introduced its upgraded in-flight menu via a tie-up with TajSats and Café Coffee Day. Also, on Friday Kapoor denied a media report that the airline is in talks with Qatar Airways to sell airport slots.