Mumbai: Asking any company if they would like a new competitor, the obvious answer would be ‘no’.
So, when the Directorate General of Civil Aviation, the aviation regulator, asked for a feedback on Tata Sons’s low-cost airline joint venture with Malaysia-based AirAsia Bhd, the Federation of Indian Airlines (FIA) and the largest player in the country, IndiGo, raised objections.
The objection can be shrugged off as obvious and routine, but not the reasoning behind it. The existing players say that giving AirAsia a permit would drive them further into losses.
Apart from objecting to the predatory pricing strategy of AirAsia, FIA members question the logic of granting permission under the FDI policy, which they claim was introduced to benefit only the existing airlines.
The Delhi High Court has thrown the ball back in the government’s court, saying the issue of FDI in airlines was a matter decided by the government and it had the right to interpret it the way it wanted to.
Apart from IndiGo, and at times GoAir, all other airlines operating in the Indian airspace are making losses. It is their own predatory pricing strategy to grab market share that has led them to the current state. Only a few days back, airline companies were jumping over each other to announce huge discounts in airfares.
21/02/14 Shishir Asthana/Business Standard
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So, when the Directorate General of Civil Aviation, the aviation regulator, asked for a feedback on Tata Sons’s low-cost airline joint venture with Malaysia-based AirAsia Bhd, the Federation of Indian Airlines (FIA) and the largest player in the country, IndiGo, raised objections.
The objection can be shrugged off as obvious and routine, but not the reasoning behind it. The existing players say that giving AirAsia a permit would drive them further into losses.
Apart from objecting to the predatory pricing strategy of AirAsia, FIA members question the logic of granting permission under the FDI policy, which they claim was introduced to benefit only the existing airlines.
The Delhi High Court has thrown the ball back in the government’s court, saying the issue of FDI in airlines was a matter decided by the government and it had the right to interpret it the way it wanted to.
Apart from IndiGo, and at times GoAir, all other airlines operating in the Indian airspace are making losses. It is their own predatory pricing strategy to grab market share that has led them to the current state. Only a few days back, airline companies were jumping over each other to announce huge discounts in airfares.
21/02/14 Shishir Asthana/Business Standard
