AirAsia just one nod shy of launching a fare war
NEW DELHI: High airfares could soon be a thing of the past as AirAsia India looks set for an April launch.
With the aviation regulator, the Directorate General of Civil Aviation (DGCA) rejecting the demand by Indian domestic carriers not to grant a licence to AirAsia India, the low-cost passenger airline could be less than a fortnight away from getting the Air Operator’s Certificate (AOC).
Together with another startup, Tata-Singapore Airlines, AirAsia India is likely to shake up the domestic market.
Rival carriers expect AirAsia India, a joint venture of the Tata Group, Malaysian low-cost carrier AirAsia and Arun Bhatia of Telestra Tradeplace Pvt Ltd, to unleash a price war in the domestic market.
AirAsia Group CEO Tony Fernandes has promised “nano AirAsia is likely to get its certificate to operate in march Its first aircraft is also slated to arrive next month
It will start operations based out of Chennai with 3 aircraft The airline has said it will offer ‘nano’ fares, and is expected to shake up advance booking ticket prices
fares”, adding that revenue management of Indian carriers is poor and airfares “just too high”.
“Subject to the AOC by DGCA, AirAsia India is expected to start from April. Their first aircraft arrives in March,” said Kapil Kaul, south Asia CEO of aviation consultancy firm Centre for Asia Pacific Aviation (Capa). Capa expects Tata-Singapore Airlines operations to start earliest by September 2014. “Till both receive their AOC, Capa remains concerned,” Kaul said.
“AirAsia’s entry is expected to shake up the advance purchase market. We expect to see aggressive pricing of tickets sold a week ahead of departure,” said Rajji Rai, chairman of Swift Travel International.
But the big question, Rai said, is whether AirAsia will be able to replicate its low-cost model’s success in India, where accumulated losses of domestic airlines since 2007 is close to $9 billion.