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The domestic aviation space is all set to witness severe competition with the entry of AirAsia India, which starts operation from Thursday.
AirAsia India, the Indian arm of the Malaysian no-frills airline headed by Tony Fernandes, will become the fourth budget carrier in the country — after IndiGo, SpiceJet and GoAir — once its maiden flight takes off from Bangalore to Goa at 15:10 hours on Thursday.
Besides these, the Naresh-Goyal-promoted full service airline Jet Airways also operates a low-cost service JetLite.
As of now among the domestic carriers, including full service ones, Rahul Bhatia-promoted IndiGo dominates the local market with 31.6% share, followed by Jet Airways-JetLite combine with 21.8% and Air India with 18.3%, according to Directorate General of Civil Aviation data for April traffic. While SpiceJet had a 17.9% market share in April this year, GoAir had 9.5%.
AirAsia India plans to focus on connecting tier-II cities to begin with.
The new entrant has already triggered the fare war by announcing fares as low as R990 for its Bangalore-Goa and Bangalore-Chennai routes, forcing the rival carriers to come out with matching fares. "Our airlines' fares will be about 35% lower than the current market rates," AirAsia India CEO Mittu Chandilya had earlier said.
IndiGo also announced promotional fares for just R1 on the Bangalore, Chennai and Goa routes, taking on the competition from AirAsia India's R5 fare (excluding airport tax and other applicable fees) offer and putting on sale over 25,000 promotional seats with travel period validity up to October 25.
Other budget carriers have also been on a low-fare spree with SpiceJet coming out with as many as 13 such offers since January this year till date with the most recent being R1,999 offer on eight cities from South India.