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Will AirAsia thrive in the Indian aviation industry?
The Indian aviation industry in moving into an interesting phase, where AirAsia India will begin their flight operations from June 12 with their inaugural Bangalore-Goa flight. Tickets for the same were sold out within the first ten minutes of the booking, cost of which was Rs 999, including taxes. AirAsia has been known world over for their low cost, and also consistently regarded as the best low cost airlines.

With such low cost in the offing, many airlines from India did not want AirAsia India to be introduced in the market, for the airlines, a joint venture between AirAsia, Tata Sons and Arun Bhatia's Telestra Tradeplace, is going to provide a strong competition in the industry. Various airlines in India have been going through huge losses, so, no one may be able to provide tickets at the same cost as that of AirAsia.

''The competition is going to be tough for Indian operators. It may lead to survival of the fittest,'' said Harsh Vardhan, Aviation expert. The fare war already seems to have started, as SpiceJet slashed their fares for several routes – Rs 2999 including taxes. Indigo also came up with cheaper fares on some routes with their Re 1 scheme. Is this the way forward?

Such kind of competition would please frequent flyers. One such flyer said, ''It is the cost, which could be the number reason for flyers to choose AirAsia India over other airlines.'' The airlines has not still entered Mumbai and Delhi, but may be doing in the near future. ''Presently, AirAsia will ply on limited routes, basically in South and East. For users on that route, it is the low cost, which is going to work.'' Most of the routes are short distance in nature as well.

But, one also has to note few things related to AirAsia India, as passengers need to pay for every additional service, including baggage and also there would be no refund on cancellation of tickets as well. Customers would not mind shelling out a few bucks if the airlines would come up with such low cost.

Various airlines were not happy when AirAsia India was granted flying license by DGCA, but AirAsia had to wait for nine long months before the final go ahead. Recently, CEO, AirAsia India, Tony Fernandes in a recent tweet said, "Some airlines scared of us. We must be doing something write (sic). Help us people of India. Don't let cartels win and not let ordinary man fly."

Federation of Indian Airlines (FIA) even asked the government to advise DGCA not to allow the new no frills airline to launch its operation, as they claim that the approval was illegal. ''FIA, unfortunately, has become an association of few airline carriers – mouthpiece of airlines. The FIA should have welcomed AirAsia,'' said Harsh Vardhan.

FIA going against AirAsia may just be the tip of the iceberg, for there may be a number of obstacles, which might fall on AirAsia India's path. They must be up for it,especially with the complicated regulatory and the fiscal policies as well. Hence, India could prove to be AirAsia's biggest test.

Talking about India being a stern test for AirAsia, Satyendra Pandey, Manager Research and Consulting, CAPA said, ''The Indian market may yet provide AirAsia with its greatest test, but the opportunities are probably also the greatest of any. The regulatory challenges faced by AirAsia India were in line with CAPA’s expectations; and reminiscent of the obstacles faced by Tata-SIA in 1996.  The extended delays in the award of a licence to AirAsia India are reflective of the unpredictability and lack of transparency in India’s regulatory framework, which continues to be the greatest strategic challenge in the market.''

In the past, there has been airlines, like Air Deccan which came into the market, as India's first low fare carrier, but due to fierce competition, the airlines was sold to Kingfisher Airlines. But, with AirAsia having gained huge ground all over the world with their low fares, one can expect them to deal with any obstacles that come their way in the right manner to succeed in India.

If AirAsia would be a huge success, expect other international airlines to follow on AirAsia's footsteps as well.


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