Asia's biggest budget carrier launched operations in Chennai, Bangalore and Goa
The price war among low-cost carriers may make fares nosedive further after Asia's biggest budget carrier, Malaysian-based Air Asia, started operations in India today.
The budget airline operated its first flight from Bangalore to Goa today at a return fare of just Rs 990. Some other airlines have crashed the base price of domestic flying in many sectors to as low as Rs 499.
Asia's biggest budget carrier - which promised a journey from Bangalore to Goa in an A 320 for Rs 450 -- launched operations in Chennai, Bangalore and Goa.
The first flight was sold out within 14 minutes of opening for sales.
But the catch is in the form of hidden charges - convenience fare, added fare to check in baggage and some others for which the passenger may have to pay more. Other low-cost carriers like Spice Jet, Go Air and Indigo too have cut fares to Rs 490 in the last one week to increase sales.
Bangalore will be made the hub for Air Asia's operations. Ten years ago, Air Deccan which introduced low-cost flying in India also launched its operations in the city, but couldn't sustain losses. Some other low cost carriers in India too have shut shop citing high taxation and fuel costs.
"Regulators are beginning to understand that air travel is not a luxury product. Things have changed and the model has become more sustainable. Ours will be a point to point model. We will be able to sustain it," Mittu Chandilya, CEO of Air Asia India, told NDTV.
He added, "We want to make flying affordable. And we, as low-cost carriers, are trying to make it easy and less stressful for passengers."
Air Asia India will have to juggle some of the highest fuel costs in the region, an array of local and national taxes, and heavy price discounting by rivals desperate to win market share.
Competition is set to increase further too, when Singapore Airlines Ltd's joint venture with the Tata Group starts flying in India later this year.