AirAsia India makes maiden flight from Bangalore to Goa
12 June 2014
AirAsia India, the Indian joint venture of Malaysian low-cost carrier AirAsia Bhd, ventured into the Indian air travel market launching its maiden flight from Bangalore to Goa on Thursday, promising to buck the trend of accelerating losses that is hurting rivals and break-even in just four months, ie, by October.
AirAsia India, the latest low-cost carrier to enter the Indian market, will be competing with established rivals such as IndiGo, SpiceJet, Jet Lite, Go Air and the state-run Air India to garner market in a high-cost market.
Fare wars in a high-cost business environment has left all but one of India`s major airlines bleeding.
Indigo is the only no-frills airline to report a profit in the country, while Jet and SpiceJet last month reported record losses as a price war intensified.
"Our fares will be 35 per cent lower than the market rates. At this rate, we believe we can sustain. Going forward, we intend to bring down the tariff further as we are sure that we could make revenues with stable operations," Mittu Chandilya said hours before the maiden flight to Goa at the Kempegowda International Airport (KIA) on the outskirts of Bangalore.
Chandilya believes his airline can break-even "in four months".
"India is a huge potential. My goal would be to scale up as soon as possible. We`re looking at bringing in maybe an aircraft a month," Chandilya said.
Chandilya declined to give specifics on its cost base - key to profitability in the cut-throat Indian market - but said AirAsia`s cost structure was one of the lowest in the industry.
AirAsia India, a three-way venture between Malaysia's AirAsia Bhd, India`s Tata Group and investment firm Telestra Tradeplace.