AirAsia India sounds price war bugle with R990 all-inclusive fare

While SpiceJet already responded by offering tickets at Rs 1,499 excluding taxes on the route, other airlines are likely to respond after the launch.

By: ENS Economic Bureau | New Delhi | Published: May 31, 2014 1:00 am

It is raining discounts for domestic flyers as the aviation industry is set to witness aggressive pricing triggered by AirAsia India that is launching its flight from Bangalore to Goa next month at an all-inclusive Rs 990.

“Bookings open on our website from 9:30 pm. Tickets are also available with our major travel partners, from tonight,” AirAsia India CEO Mittu Chandilya said on Twitter.

As part of its inaugural offer, AirAsia India is selling 15,000 seats for Rs 5 per seat, excluding taxes and fee. The seats can be booked between May 30 and June 1, for travel June 12 and October 25. They would be available on the Bangalore-Chennai and Bangalore-Goa sectors.

While SpiceJet already responded by offering tickets at Rs 1,499 excluding taxes on the route, other airlines are likely to respond after the launch.

After the AirAsia announcement, the lowest one-way for the Bangalore-Goa route on June 12 was quoting at Rs 2,058 including taxes and Rs 1,858 for Goa-Bangalore.

Analysts say that other airlines would respond to AirAsia. “All key airlines operate flights in the Bangalore-Goa sector and we expect them to respond to fare cuts,” said Sharat Dhall, president, Yatra.com.

While flyers may benefit from the aggressive pricing, it may not be sustainable. “Based on established behaviour of incumbent carriers, the competition will greet AirAsia with tactical fares intended to erode any price advantage they may seek to offer. In the ensuing low fare, high cost environment, it would be remarkable if the start-up was able to meet its target of achieving break-even within four months of launch,” said Kapil Kaul, CEO, Capa.

For all the latest Business News, download Indian Express App

    Live Cricket Scores & Results