The Telegraph
Thursday , June 12 , 2014
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Intense rivalry in the air

Ready to take off

New Delhi, June 11: The first flight of AirAsia India will take off tomorrow at 3.10pm from Bangalore for Goa, intensifying the competition in the local skies.

Analysts said AirAsia’s entry could trigger a fresh round of price wars at a time some leading players have reported huge losses.

AirAsia India, the domestic arm of the Malaysian no-frills airline AirAsia Berhad headed by Tony Fernandes, will become the fourth budget carrier in the country after IndiGo, SpiceJet and GoAir.

Naresh Goyal-promoted full service airline Jet Airways also operates a low-cost arm JetLite.

“We honestly believe that we have to be disruptive in pricing. I believe with our model and structure, it is very sustainable. Disruptive pricing is the only way to penetrate the market,” AirAsia India CEO Mittu Chandilya said. The airline is targeting to capture at least 10 per cent market share in this financial year.

On May 30, AirAsia India had announced the availability of 15,000 tickets at a base fare of Rs 5, excluding airport taxes and other fees. Tickets under this offer were sold out by June 1.

The inaugural flight of the airline was a sellout within 10 minutes of opening for booking. Besides, 25,000 seats were booked within 48 hours of the announcement.

To counter AirAsia’s aggressive pricing, other airlines have also come out with matching fares.

IndiGo has announced promotional fares of Re 1 on the Bangalore, Chennai and Goa routes.

SpiceJet has since January come out with 13 different offers, the most recent one being tickets for as low as Rs 1,999 from eight cities in south India.

According to AirAsia India’s officials, Chandilya and Fernandes will be on board the inaugural flight. Recently, Chandilya tweeted his plans of using the Indian arm to fly passengers to Southeast Asia and Australia.