The Genghis Khan of air travel in Asia has arrived. This guy is known to do to fares what the Mongolian warrior legend did to traitors’ heads: Chop them. His slash-and-burn has already begun. His airline AirAsia is offering a return ticket to Malaysia from Indian cities for less than Rs. 10,000, half the price that everyone else is charging. “At these prices, demand is a no-brainer. Full-service airlines like Malaysia Airlines, Jet Airways and Thai stand no chance,” says Madhav Oza, director of Blue Star Travels, one of the country’s largest travel companies.
Smoking Aces
Call it tsunami marketing. That’s how Kathleen Tan, who heads the airline’s commercial operations in India, describes their approach. “We do not believe in half measures,” she says. AirAsia group’s entry into India will be through three separate companies — a strategy never tried by any other airline before. The Government of India clearances weren’t easy, but are now finally in place. The Sepang-based parent AirAsia Bhd will start flights from Kuala Lumpur to Hyderabad, Banglore and Chennai in stages this year. This is in addition to Trichy, Kolkata, Kochi and Thiruvananthapuram, which are already connected. Thai AirAsia (a joint venture with Shin Corp) will start with flights from Bangkok to four points in India later this year. This will open up Phuket, Krabi and nine other points in Thailand to passengers from India, who can connect to them from the AirAsia Bangkok hub. The third company, the group’s long-haul airline AirAsia X (a venture with the Virgin group) will start flying to Mumbai and Delhi by the middle of the year with bigger A330 planes.
(This story appears in the 19 February, 2010 issue of Forbes India. To visit our Archives, click here.)
A very well covered article. Tony has passed a very clear message to the Indian carriers that he will take them Head on. I agree that the Indian carriers have formed a cartel (though I am also convinced that they needed some regulation on the Rs. 1 fares, which was not sustainable). In all it looks like the Indians are set to pack their bags and will be getting ready to explore the world. Strategically the timing by Air Asia is perfect, the economy is bouncing back and the the Indian LCC's have done a good job of bringing about a change in the mindsets of the Indian traveler who look for a value purchase in getting from point A to point B instead of the attached frills. I wish Tony all the best in his endeavors in India as he goes after market stimulation in getting first time fliers out of India on Air Asia flights.
on Feb 8, 2010Good luck Tony. Now is the time for him to look at Mid Eastern countries where people from the subcontinent have paid "published" fares for too long. Under the open skies policy he should make Goa/Trivandrum his destination from places like Dubai, AbuDhabi and Kuwait.
on Feb 13, 2010