AirAsia to offer fares as low as Rs 1,000

Discussion in 'Economy & Infrastructure' started by Daredevil, Mar 8, 2013.

  1. Daredevil

    Daredevil On Vacation! Administrator

    Joined:
    Apr 5, 2009
    Messages:
    11,613
    Likes Received:
    5,670
    AirAsia may avoid flying on the Mumbai-Delhi route and focus on smaller cities and the southern metros in a unique strategy to keep costs low and capture a larger slice of the fast-growing flying population in the rest of the country.

    The Tony Fernandes-run budget carrier, which rattled the aviation ministry and some of the country's established carriers by announcing an airline venture with the Tata Group last month, will focus on Chennai, Hyderabad, Bangalore and northern cities like Jaipur, Ahmedabad, top airline officials have said.

    The decision is surprising as Mumbai and Delhi are the most lucrative flying routes with all domestic airlines having a presence. But flying to these airports is also expensive as landing and other charges are at least 25% higher than other airports. The cities also don't have low-cost airports. "We are going after a pan-India licence and not a regional one," Suresh Nair, AirAsia regional manager — India, Sri Lanka and Bangladesh, said, explaining the group strategy.

    "Avoiding Delhi and Mumbai doesn't make us a regional carrier because India is much beyond that. If we fly, say, Chennai-Ahmedabad or Chennai-Jaipur, that would mean national operations. We would fly wherever we can to keep cost of operations low," he added.

    The move is in sync with AirAsia's disruptive strategy and its desire to grab a bigger market share of passenger traffic outside the two big cities. A section of the travel fraternity still thinks that AirAsia would be able to offer competitive fares not only by adopting certain practices unique to them and but also those not yet tried in India.

    Having a domestic network helps cope with expensive airports but the costs involved in operating from Delhi and Mumbai will still be quite high for a budget carrier. Keyur Joshi, COO of Nasdaq-listed travel portal makemytrip.com expects the company to avoid some of the major cities, not just Delhi and Mumbai. "I expect them to avoid Delhi, Mumbai, Bangalore and Hyderabad to keep costs low. Indian airlines have not been able to negotiate with airport operators to resolve that. AirAsia may also prefer to add more frequencies on a route rather than going after many routes, something not yet tried in India," he added.

    In a conference call with reporters on February 21, Tony Fernandes said the airline will avoid Delhi and Mumbai. "We will avoid certain airports like Delhi and Mumbai because of high charges and also because these airports are slot constrained. We will stimulate the market first with low-cost structure and later as the airports are being developed, we would also look at these newer markets. India is a huge country and we are confident that we will succeed," Fernandes had said.

    It is not yet clear whether AirAsia will completely avoid these two cities, as in not ferry passengers from other destinations to the two top metros. Nair said the routes have not been finalised and can't yet make a comment. While AirAsia is entering the domestic market for the first time, it has been flying between several Indian cities and south-east Asian countries.

    The experience so far has not been very good. The airline plans to pull out of flying between Delhi and Bangkok and rival IndiGo has responded aggressively by doubling services on the same route. High airport charges forced it to withdraw services between Kuala Lumpur and Hyderabad in 2010 while its long-haul arm AirAsia X pulled out of Delhi and Mumbai in January last year for the same reason.

    "We don't know why airlines don't come together on these issues. Every rupee makes a difference. We also know that costs of a couple of airlines are very low but they are not offering that price to customers," Nair said.

    AirAsia may also offer fares as low as Rs 1,000 to lure passengers when it begins operations in India though a successful replication of its South-east Asian model may be difficult due to the country's high-cost structure. The Malaysian budget airline will start fares at Rs 999 for flyers wanting to book months in advance and hopes to make early booking a regular habit.

    AirAsia to offer fares as low as Rs 1,000; may skip Mumbai-Delhi route - The Economic Times
     
  2.  
  3. Blackwater

    Blackwater Veteran Member Veteran Member

    Joined:
    Jan 9, 2012
    Messages:
    20,981
    Likes Received:
    11,810
    Location:
    Akhand Bharat
    1000 rupess,

    my Q are

    will they provide seats or have to go standing?

    will they provide meal or we have to bring own prantha wrapped in silver foil??


    :confused::confused:
     
    prahladh likes this.
  4. Daredevil

    Daredevil On Vacation! Administrator

    Joined:
    Apr 5, 2009
    Messages:
    11,613
    Likes Received:
    5,670
    :dude:

    Of course you will have seats. It will be similar to Ryan Air.
     
  5. Blackwater

    Blackwater Veteran Member Veteran Member

    Joined:
    Jan 9, 2012
    Messages:
    20,981
    Likes Received:
    11,810
    Location:
    Akhand Bharat
    you mean paid food ,pay for luggage etc etc. but 1000 seems to less for del-bom route
     
  6. Daredevil

    Daredevil On Vacation! Administrator

    Joined:
    Apr 5, 2009
    Messages:
    11,613
    Likes Received:
    5,670
    It is not Del-Mum route. It would be some shortest route.
     
  7. rock127

    rock127 Maulana Rockullah Senior Member

    Joined:
    Aug 12, 2009
    Messages:
    8,935
    Likes Received:
    10,277
    Location:
    India
    May be they would attach a Trailer behind plane which would carry Rs1000 ticket wallah. :lol:
     
  8. Daredevil

    Daredevil On Vacation! Administrator

    Joined:
    Apr 5, 2009
    Messages:
    11,613
    Likes Received:
    5,670
    Guys don't think it as a joke. These rates are quite possible and already happen in certain european countries, US and South east asia.
     
  9. Blackwater

    Blackwater Veteran Member Veteran Member

    Joined:
    Jan 9, 2012
    Messages:
    20,981
    Likes Received:
    11,810
    Location:
    Akhand Bharat
    but Rayan air quality has been compromised, recently they were accused of flying with low fuel to save money,
     
  10. roma

    roma NRI in Europe Senior Member

    Joined:
    Aug 10, 2009
    Messages:
    3,245
    Likes Received:
    1,858
    not unusual .....when budget airlines were first started in other regions of the world , we also heard our fair share of jokes !

    but what is not so funny is the quality of the maintenance - some budget airlines have higher accident rates than the full- fee paying airline ?
     
  11. Yusuf

    Yusuf GUARDIAN Administrator

    Joined:
    Mar 24, 2009
    Messages:
    24,272
    Likes Received:
    11,273
    Location:
    BANGalore
    If they don't fly to Delhi,Mumbai, Bangalore and Hyd for high airport fees, what else will they cater to? Other routes will not have traffic. One example given was te Chennai-Jaipur route. Seriously how many people travel between those cities everyday? Airlines adjust the cost of the airport fees into the fare for which the customer pays. Not having service to high airport tax routes serves nothing. You become low fare by lowering your operational costs not by skipping routes that are high on airport tax. I don't get the funda of Air Asia
     
  12. Sam2012

    Sam2012 Tihar Jail Banned

    Joined:
    Dec 10, 2012
    Messages:
    743
    Likes Received:
    205
    Location:
    Bangalore
    Bro 1000 rupees is basic fare there will Tax in some state tax is more than fare :lol: eg: Karnataka

    I wish One Day Tata & Mahindra become Boeing or BAE of India with fully fledged Indigenize defence equipment base:hail:
     
  13. anoop_mig25

    anoop_mig25 Senior Member Senior Member

    Joined:
    Aug 17, 2009
    Messages:
    5,195
    Likes Received:
    2,223
    First let clear this hurdle

    Post FIPB, Tata-AirAsia flight faces fresh turbulence

    New Delhi, Sat Mar 09 2013 , Indian Express , ENS Economic Bureau :

    After clearing the Foreign Investment Promotion Board (FIPB) hurdle, the proposal by Malaysia-based AirAsia Berhad and the Tata Group to float a domestic airline is headed into some turbulence. The civil aviation ministry is likely to raise objections to the application on the grounds that the proposed company could end up with a majority ownership in the venture vested with the foreign partner.

    Issues that are likely to be raised when the airline applies to the civil aviation ministry for a 'no objection certificate', include the point pertaining to the foreign partner being the single largest shareholder in the venture and on the use of the AirAsia brand name.

    "There are various issues with the proposal and all of it will be scrutinised after the proposal comes to us. They key one is a majority ownership by AirAsia, the foreign partner, and minority ownership by two Indian partners. This will raise an issue of effective control over the airline, which cannot be foreign. Plus, the plan to use AirAsia brand name also creates an impression that the effective ownership will be with the foreign partner. All these will be scrutinised, when they come to us for approval," said a senior civil aviation ministry official.

    In February, AirAsia Investment had moved an application with FIPB seeking approval for the joint venture company in which AirAsia is the largest shareholder with 49 per cent stake, Tata Sons holding 30 per cent and Arun Bhatia's Telstra Tradeplace holding 21 per cent. The FIPB cleared the proposal on Wednesday even after the civil aviation ministry's representative objected to the clearance on the ground that foreign direct investment norms do not allow any new airline to launch operations.

    But some officials of the finance ministry and the Department of Industrial Policy & Promotion (DIPP) reportedly cleared it on the grounds that the wording of the DIPP's press note 6 meant that is leaves enough leeway for new airline companies to be set up and qualify for the foreign investment infusion, primarily on account of a strategically placed punctuation mark in the operative sentence in the press note.

    The civil aviation ministry official, however, said that there was no comma in the cabinet note. "The Cabinet note does not have a comma meaning it cannot be allowed for new entities. This needs to be clarifies or there will be lot of confusion ahead," said the official.

    After the FIPB permission, the company will have to get the NOC for the civil aviation ministry. The proposed company, as per present rules, must possess at least 5 aircraft and have a paid-up capital of Rs 50 crore if these aircraft are more than 40 tonnes in weight. Once the NOC is in place, the company will have to apply to the Directorate General of Civil Aviation (DGCA) for a flying licence.
     
  14. pmaitra

    pmaitra Moderator Moderator

    Joined:
    Mar 10, 2009
    Messages:
    31,625
    Likes Received:
    17,104
    Location:
    EST, USA
    Wait, wait. Let me get this straight.


    This "as low as Rs. 1000" fare includes all the taxes and fees or not? Can someone clarify? The opening post says nothing about fees. Also, this could be just another ploy where the first 10 tickets will be sold for a ridiculously low fare, and the later ones will be expensive.
     
  15. amoy

    amoy Senior Member Senior Member

    Joined:
    Jan 17, 2010
    Messages:
    5,519
    Likes Received:
    1,544
    that's true their published air fare changes day by day on line subj to load factor hence probably only early birds hav access to rs.1k +tax? and once an e-booking confirmed cancellation or revision fee is super high. also late night departure or delay often anticipated.

    just experience

    Sent from my 5910 using Tapatalk 2
     

Share This Page