Page 23 - AAA JULY - AUGUST 2014 Online Magazine

FEATURE FARE WAR
FEA TURE F ARE W AR

AirAsia India Triggers Fare War

Airlines are taking steps to protect their market share By Subodh Agarwal

The india venTure of airasia has main competitors - Indigo, SpiceJet, Air
fuelled a fare war in the country’s already India and Jet Airways also decided to
bleeding aviation sector, raising fears of lower their fares on these sectors and on
increasing financial distress and probable other possible routes where AirAsiaIndia
exit of few cash-strapped airlines. is planning to fly.
AirAsia India started its operations on SpiceJet announced a “special
June 12, with an alluring promotional fare promotional fare” of 1,499 rupees on
of 990 rupees ($17) for flights between various routes. Even full service carriers
high-tech hub Bengaluru and the popular such as Jet Airways and national carrier
coastal resort of Goa, tickets for which Air India cut fares to bring it on par with
were sold off in minutes. The normal rate low-cost carriers to get a market share
for a return ticket in this sector is around in this busy sector touching Bengaluru,
5000 rupees. Chennai and Goa.
AirAsia is currently the biggest budget “Every airline will have to take steps to
carrier in Asia, and is well known for its protect their market share. The changes
strategies to maintain low airline costs. are evident in the Indian market scenario
For AirAsia India CEO Mittu Chandilya in the past few months since AirAsia
the “collective goal is that every Indian announced its entry,” says a Civil Aviation
should have an opportunity to fly.” Ministry official.
Chandilya says his airline’s fares will be Recently, SpiceJet offered 100,000
about 35 percent lower than the current tickets at heavily discounted prices for
market rates. travel during the lean season. Some,
After AirAsia India, the first airline such as Jet Airways, made public
with foreign investments operating in the announcements about the price cut, while
country, announced the launch of its flights Air India and IndiGo did this in a more
from Bengaluru to Chennai and Goa, its subdued manner.
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