New Delhi: The entry of new carriers AirAsia India and Tata SIA is likely to intensify the price war in the sector.
Malaysia-based carrier AirAsia launched its Indian arm last week, pricing tickets at so low that existing players had to come up with matching offers in the peak holiday season — a time when they try recover their losses.
Mittu Chandilya, chief executive officer of AirAsia India, had earlier said his vision was “to change the way people travel in India”, and make AirAsia India “the biggest airline” in the country. “We are trying every day to reduce the fares,” Chandilya said.
Analysts fear the price war will further intensify when AirAsia expands its fleet by July-September, bleeding the already loss-laden carriers.
Last year, the industry witnessed combined losses of over Rs 7,600 crore, with some of the leading players ending in the red.
The Federation of Indian Airlines, a trade body of existing airlines, had made a final appeal early this month to the new BJP-led government to stop AirAsia.
“While foreign investment needs to be encouraged, the same cannot be at the cost of the domestic industry,” said the federation’s associate director Ujjwal Dey.
Some others, however, view this as an opportunity for the industry to grow.
15/06/14 Kiran Chowdhury/Telegraph
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Malaysia-based carrier AirAsia launched its Indian arm last week, pricing tickets at so low that existing players had to come up with matching offers in the peak holiday season — a time when they try recover their losses.
Mittu Chandilya, chief executive officer of AirAsia India, had earlier said his vision was “to change the way people travel in India”, and make AirAsia India “the biggest airline” in the country. “We are trying every day to reduce the fares,” Chandilya said.
Analysts fear the price war will further intensify when AirAsia expands its fleet by July-September, bleeding the already loss-laden carriers.
Last year, the industry witnessed combined losses of over Rs 7,600 crore, with some of the leading players ending in the red.
The Federation of Indian Airlines, a trade body of existing airlines, had made a final appeal early this month to the new BJP-led government to stop AirAsia.
“While foreign investment needs to be encouraged, the same cannot be at the cost of the domestic industry,” said the federation’s associate director Ujjwal Dey.
Some others, however, view this as an opportunity for the industry to grow.
15/06/14 Kiran Chowdhury/Telegraph
