AirAsia Triggers Fare War Ahead Of Its Launch

Thursday, 10th July 2014 at 04:39am

The debut of AirAsia in the Indian market has sparked a sale frenzy among existing local players initiated by IndiGo, India's largest budget carrier. Rivals followed shortly, commencing what seems to be a fare war.

There's no stopping for AirAsia India to start its commercial operations after it secured its air operator's permit from the aviation regulatory board early last month.

The market debut of the local subsidiary of Asia's largest budget airline has been the most awaited event in the local travel industry to date. Small wonder for AirAsia, but welcome news to local travelers�"and a headache to airline rivals.

The airline had just launched its promotional seat sale offering tickets for as low as Rs990 ($17) for the Bangalore-Goa flight. To its surprise, all seats were sold in just 10 minutes, something rival airlines wonder in disbelief. Their amazement didn't stop there as all 25,000 seats on sale were snapped up in just 48 hours of the sale period.

AirAsia India will initially start serving two routes, both from its hub in Bangalore. Aside from Goa, the airline is also launching another flight to Chennai on that same day. Later on, in July, another route is on the pipeline for launching.

It will have a fleet of a single aircraft, an Airbus A320, serving the twin routes. However, it will acquire another aircraft of the same variant in two months.

It wants to achieve what most local low-cost airlines failed to do like a much quicker turnaround time for each aircraft. The faster the turnaround time, the better for the airline to optimize the utilization of its aircraft by keeping it flying far longer than the global industry level. In doing so, it is able to increase the aircraft's productivity resulting to improved operating costs.

Indian travelers haven't seen a fare sale more often than two times in one year. With AirAsia India entering the market, they will expect to find seat sale more often that would certainly trigger air travel demand from a market dictated by seasons and necessity, not so much by affordability.

AirAsia will soon change that. It has revolutionized air travel in Southeast Asian region with the introduction of its low-cost carrier and it will do the same in India.

Local existing carriers have so much to worry about its entry knowing AirAsia's business practice. Most of them have been piling up losses and are mired in debt for years due to high operating costs, sky-high fuel prices and low demand.

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