Flying to South-East Asia gets a lot cheaper

Mumbai: It’s a new turf for low-cost carriers (LCCs) where they are setting the rules of the game offering never-before rates with a lot more flight options. South-East Asia, the second-largest market for airlines from India — with 30% of the total international travel coming from this market — is set to witness a shakeout of sorts with LCCs challenging the dominance of traditional full-service network carriers like Singapore Airlines, Cathay Pacific and Thai Airways.
A virtually non-existent LCC market had helped these carriers garner more than 50% of the market share from India till now. But with Malaysian and Singapore-based low-cost carriers eyeing the void in the Indian market, the dynamics are bound to change. And, it’s only natural that when players like Air Asia, with its budget long-haul service Air Asia X, announced flights from Mumbai to Kuala Lumpur at rock-bottom prices established players like Jet Airways, Cathay Pacific and Malaysian Airlines were forced a re-look at their Indian operations.
In fact, the below cost pricing offered by Malaysian carriers forced the Indian regulator to intervene and sternly warn airlines on the price war and that they cannot sell at the offered prices. For example, a ticket from Mumbai to South-East Asian destinations like Hong Kong, Singapore and Kuala Lumpur is between Rs 14,500 and Rs 18,000 on Cathay Pacific, Malaysian Airlines or Jet Airways. Air Asia has rattled the market with an offer price of Rs 9,000 to Kuala Lumpur. “We are bullish on the Indian market, with a billion people this is a huge market. We will soon take the number of flights to India up to 140 per week from the current 78 flights,” said Sherliza Zaharudin, Air Asia.
16/03/10 Manisha Singhal/Economic Times

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Categories: Foreign Mar 2010