New Delhi: Captain GR Gopinath, who founded India's first budget airline, thinks the proposed joint venture between international budget carrier AirAsia and the Tata Group will "stimulate" the market by opening new routes.
"They will break the 'cozy cartel' and offer cheaper fares. True low-cost carriers stimulate the market and expand the consumer base," Gopinath told ET.
Referring to the contraction in air traffic growth due to high fares, Gopinath said low-cost players had failed to create growth. "Indigo airlines, a well-run airline, grew by cannibalising passengers from other airlines, especially Kingfisher, Air India and even Jet, but not by creating a new market. That is not sustainable in the long run."
AirAsia is expected to own 49% of the new venture, with Tata Sons and Bhatia-controlled Telestra Tradeplace owning 30% and 21%, respectively.
21/02/13 Anindya Upadhyay/Economic Times
