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In a change from his previous stance AirAsia group chief executive officer Tony Fernandes said his airline in India will start flights to Mumbai soon.
" In Incredible India, Bombay is changing by the day. AirAsia India will be starting in this metro soon. We are coming,'' Fernandes tweeted on Thursday. The remark was greeted both by excitement and surprise as Fernandes had announced last year that AirAsia India will skip Mumbai and Delhi due to high airport charges.
While Fernandes did not indicate a date, aviation sources said AirAsia is likely to launch Mumbai flights from early 2015. It has not applied for slots at Mumbai airport for the winter schedule beginning October end.
The other start up airline, Vistara, which is a joint venture of Tata group and Singapore Airlines will be based in Delhi. Vistara will fly to Mumbai amongst nine destinations and is awaiting approval from the Directorate General of Civil Aviation to launch operations.
AirAsia India commenced operations in May and operates two Airbus A320 planes from Bangalore to Goa, Chennai, Kochi, Chandigarh and Jaipur. The airline expects to add 3-4 additional A320s and launch flights to Guwahati over the next few months. It recorded a load factor of 73 percent in August which is higher than Air India and Jet Airways but lower than other low cost airlines.
AirAsia is facing stiff competition on all its routes with IndiGo and Jet Airways adding flights on these routes. The airlines are also locked in a fare war to increase the traffic.
"We are not surprised (about plans to start Mumbai flight). It is on expected lines. Challenges faced on current routes may force a rethink on entire network strategy which means a more direct competition with other key carriers,'' said Kapil Kaul of Centre for Asia Pacific Aviation.
"The entry of Air Asia into India's financial capital Mumbai has the potential of creating a huge competitive space - both a challenge and an opportunity. We have seen Air Asia's arrival already triggering off fare wars and participation from not just LCCs but also full service carriers. Short haul sectors have traditionally been the playing field of a price sensitive segment and while competition no doubt augurs well for consumers, we would urge rationalisation and a balanced perspective keeping in mind the financial health of the aviation industry, already witnessing serious challenges,'' said Indiver Rastogi, chief operating officer & head (corporate travel) of Thomas Cook.
