SpiceJet welcomes AirAsia with fresh fare war

Written by Roudra Bhattacharya | New Delhi | Updated: Jun 1 2014, 03:28am hrs
Even before AirAsia India takes to the skies from June 12, a fare war in anticipation of the tough competition the new player will bring has already started. On Thursday, a day before AirAsia India opened its ticket sales, the countrys second-largest low-cost carrier (LCC) SpiceJet announced discounted fares starting R1,499, for exactly the same two routes that the new airline will start with Bangalore-Goa and Bangalore-Chennai, sources said.

What is even more interesting is that the offer is for travel starting June 12, exactly the same day that AirAsia starts operations. SpiceJet, in fact, has not kept a closing date for the offer, which is a departure from previous sales and which means that one can effectively book tickets at discounted fares for the routes valid for travel till the end of the year.

It is not surprising that domestic players are getting aggressive, especially when barring IndiGo every other airline is notching up losses and is deep in debt. AirAsia, which got its flying permit earlier this month and whose government approvals have been challenged in Delhi High Court, has made ambitious claims of cutting fares by 35% and has said that it expects a break even in four months. However, with much of the costs such as fuel air airport charges the same across the industry, it remains to be seen how the new airline will make its maths work.

There is more around the corner. Another new airline, Tata-SIAs flying permit is also pending with the regulatory agency, with expectation that the full-service airline will start services towards the end of the year.