AirAsia India's flight launch may trigger fare war

The airline's new cost is likely to now force other carriers to review fares on this sector

In a move that is likely to trigger price war in the aviation industry, new low cost airliner AirAsia India today said its maiden flight on Bangalore-Goa route on June 12 will cost just Rs 990 including taxes.

The airline will open the bookings this evening on its website, AirAsia India CEO Mittu Chandilya said.

"Our collective goal is that every Indian should have an opportunity to fly. We have our plane parked here already", he told reporters here.

Earlier, Chandilya had told PTI that the airlines' fares will be about 35% lower than the current market rates.

"June 12 would be the first flight. It will be A320 (aircraft). The timing of the flight will be around 3pm from Bangalore to Goa, and then back from there (Goa) around 6'0 clock," Chandilya said, adding that the airline is not looking at operating from Delhi and Mumbai for now.

AirAsia India, a joint venture between Malaysian carrier AirAsia, Tata Sons, and Arun Bhatia's Telestra Tradeplace, was granted flying licence by aviation regulator DGCA earlier this month after 9-month-long wait and various legal hurdles.

In anticipation of the airline's entry into the Indian market, no-frill airlines such as SpiceJet and IndiGo have forced all other carriers to offer discounted fares over the past few months.

AirAsia India's offer of Rs 990 including taxes is likely to now force other carriers to review fares on this sector on the same day, which now cost around Rs 5,000 one-way.

"AirAsia will be opening up the bookings this evening. By 9.30 pm our fares will be up there on our website. Our first route will be from Bangalore to Goa and Goa to Bangalore. We are very excited about that," Chandilya said.

To a query, on the airline total load factor, he said: "I would love to have 100% load factor. But 60% will be reasonable. For the fare we are going with Bangalore-Goa. It will be Rs 990 inclusive of taxes," he said.

Asked about other airlines mulling reduction in airfares, he said: "Frankly, my view on that is it will help companies to rationalise costs. That is the way, I look at it."

On the expansion plans, he said the airline during the current financial year would connect 10 cities across the country with 10 aircraft.

"We have a plan. Our hope is that in this financial year we will probably add about 10 cities. For that we will have about 10 aircraft. Turnaround time will be anywhere between 25 minutes and 35 minutes," he said.

Declining to reveal the name of the cities, Chandilya said that at this point of time the company would not look at entering Mumbai and New Delhi.