New Delhi: is airline has been synonymous with rock-bottom fares that cannot be easily undercut by rivals. So, when Tony Fernandes, chief executive of AirAsia, announced last week that he was setting up a joint venture with the Tatas to enter the Indian skies, no one in the aviation business was amused, except, of course, the millions of passengers who expect the new entrant to unleash a fare war that could force other domestic carriers to follow suit.
After taking over the near bankrupt airline in 2001, Fernandes changed the rules of the game by challenging Malaysian Airlines with fares of just 1 ringgit (Rs 17.42) from Kuala Lumpur to various destinations in Southeast Asia. It is a strategy which Fernandes has replicated across Southeast Asia. AirAsia's tickets are priced at nearly half (on Kolkata-Kuala Lumpur route) to a sixth (on Singapore-Kuala Lumpur) of its nearest rivals. And the tried and tested strategy is reaping results. The company posted a profit of $291 million in 2011.
Fernandes,48, who has spent several years in Kolkata, makes no bones that he plans to reprise his winning strategy, which has made him the undisputed king of low-cost carriers in Southeast Asia, this time too.
25/02/13 Surajeet Das Gupta/Business Standard
