AirAsia India To Take Off This Month

Tuesday, 3rd June 2014 at 07:08am

AirAsia Bhd. will mark another milestone in its history when it launches its Indian subsidiary on June 12, 2014 with its inaugural service from Bangalore to Vasco de Gama in Goa. AirAsia India, the newest member to the low-cost family based in Malaysia, will finally take off after more than a year since it was founded in January 2013.

The Indian subsidiary of the highly successful low-cost regional leader is a joint venture between India's largest business conglomerate, Tata Group, and Malaysia's AirAsia Bhd. It was formed immediately after the Indian government relaxed its FDI policy on foreign ownership of a local Indian carrier.

Aside from Vasco de Gama in Goa, the airline will also launch a direct service from Bangalore to Chennai, a coastal city in the state of Tamil Nadu on the west coast of the Bay of Bengal.

AirAsia India, much like its sister subsidiaries, will operate on a low-cost business model offering super low-priced tickets to any destinations within its network.

Tickets purchased during its inaugural service will not get a refund in case the booked tickets are canceled or not flown. Additionally, the inaugural fares don't allow free checked baggage.

Compared to the existing and more established rivals, AirAsia may be in a disadvantaged position as it doesn't allow free checked-in baggage. IndiGo and SpiceJet both offer free 15 kg of checked-in baggage per passenger per sector and refund canceled tickets. However, they charge for any additional service incurred by their passengers such as meals, preferred seats, extra baggage, and even priority boarding, ranging from Rs.200 to Rs.600.

The entry of AirAsia India in the Indian market was met with controversy and opposition from other well-established airlines. In fact, the local airlines banded together to form a group called Federation of Indian Airlines and filed a class suit against the new airline company.

The group argued that the budget airline didn't follow the provision in the recently-amended FDI policy, specifically where it says the 49% foreign ownership in a joint venture only applies to existing airline.

Tony Fernandes was not happy with how the local airlines reacted to the entry of his new airline venture in the Indian market. He specifically accused IndiGo of stalling its entry with the class suit that it has initiated. He countered that it hasn't violated any laws or provisions in the amended aviation law.

The airline is hopeful that it would eventually solidify its foothold in India by offering super low-priced tickets to travelers, something they have never seen before.

By: Pete Lee.