New Delhi: Hours after AirAsia (India) Pvt. Ltd announced it was opening its flights for bookings, rival budget airline SpiceJet Ltd launched a fare war on the same sectors the new airline is supposed to operate.
AirAsia will start offering flights from 12 June, most likely on the Bangalore-Chennai and Bangalore-Goa routes, and the fares are likely to be Rs.1,499, said a person close to the development, though AirAsia did not say which sectors it plans to fly. The person declined to be named. Mint couldn’t independently confirm the figure.
SpiceJet is offering discounted fares of Rs.1,499, excluding statutory fees, for flyers planning a trip on the Bangalore-Goa and Bangalore-Chennai routes for travel dates from 12 June.
Tony Fernandes, group chief executive officer (CEO) of AirAsia Bhd, said in a post on Twitter on Thursday: “Very very proud to announce AirAsia India open for sale tomorrow. Wow. First flight June 12th.”
AirAsia India is venture of Malaysia’s AirAsia, Tata Sons Ltd and Arun Bhatia of Telestra Tradeplace Pvt. Ltd.
The Bangalore-Goa route is considered better in terms of yield, the same person quoted above said, as its a 24-hour journey by train. In comparison, Chennai-Bangalore is a shorter train journey and because the Bangalore airport is on the outskirts of the city, many people prefer taking the Rs.500 train journey between the two cities.
AirAsia’s website showed options for Chennai and Goa from Bangalore, indicating that the flights could indeed be from the IT city.
The lowest one-way fares on Bangalore-Chennai for 12 June are priced at Rs.2,800 and Chennai-Bangalore at Rs.3,800, while Bangalore-Goa is priced at Rs.4,106 and Goa-Bangalore is Rs.2,503.
SpiceJet was quick to react to AirAsia on these routes.
“As part of the ongoing policy of the airline to stimulate the market by offering attractive fares and grow the travel industry, SpiceJet is glad to come out with this special offer on high demand routes like Goa and Chennai from Bangalore,” said Kaneswaran Avili, chief commercial officer, SpiceJet, in a statement released five hours after AirAsia formally announced its entry.
While budget airlines ask passengers to pay separately for services like seat selection, Air India Ltd, which does not charge extra for most facilities, was already offering a return ticket on the Bangalore-Goa sector for Rs.7,330, including taxes, for travel on 12-15 June.
SpiceJet’s announcement is reminiscent of similar fare wars in the middle of the previous decade when new entrants Kingfisher Airlines Ltd, GoAir and Air Deccan fiercely competed with Air India, Jet Airways (India) Ltd and Air Sahara to bring down fares.
AirAsia’s entry will help passengers as airlines will woo passengers more aggressively, said an analyst.
“I would expect them to create a bit of buzz in the market, considering their past statements,” said Sharat Dhall of Yatra.com, an online travel agent.
He said the first few tickets may be priced cheaper and they will become expensive as the travel date comes closer.
“They (AirAsia) are playing their cards very close to the chest,” Dhall said on the silence on airfare pricing and routes so far. “We are looking forward to their entry into the domestic airspace and hoping that it will stimulate the market and revive growth in a market stagnant for the last couple of years. From a passenger point of view, with AirAsia, the peak festival starting in October will be even more exciting.”