SpiceJet welcomes AirAsia with fresh fare war

May 31 2014, 10:50 IST
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A day before AirAsia India opened its ticket sales, SpiceJet announced discounted fares for exactly the same two routes that the new airline will start with. (Reuters) A day before AirAsia India opened its ticket sales, SpiceJet announced discounted fares for exactly the same two routes that the new airline will start with. (Reuters)
SummarySpiceJet's discounted fares start at Rs 1,499 for exactly same two routes that AirAsia will start with.

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 country’s second-largest low-cost carrier (LCC) SpiceJet announced discounted fares starting Rs 1,499, 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-SIA’s 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.

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