Monday, August 05, 2013

AirAsia plans 'zero fares' to take on competition, gain foothold in India

Mumbai: Maverick business tycoon Tony Fernandes-led AirAsia plans to make a splash in the Indian market as it launches this October offering schemes like 'zero fares' and other promotional fares to gain foothold in the country, which is likely to set off a fare war.
The airline, which plans to begin its stint in India with three aircraft, followed by ten in the next year, will target tier 2 and 3 cities in south India to begin with, Mittu Chandilya, chief executive, AirAsia India, said in an exclusive interview.
"India is an exciting as well as a challenging marketplace to be," says Chandilya, a former model and aviation consultant who will operate from the firm's office in Chennai. "With just 60 to 70 million Indians travelling by air, the opportunity is big. But the challenge will be to keep costs within control."
The Indian skies have seen low-cost carriers like Air Deccan and the likes of Kingfisher Airlines lose their plot and either sell off or shut down operations.
"In this market, you have to get your models and cost right," says Chandilya. "You need to drive home a culture of being low cost in everything you do."
05/08/13 MG Arun/Business Today