Taking wings

Air Asia India has become the newest airline to take to domestic skies in the country, starting its operations on Thursday. It is also the fourth budget carrier to launch the venture and will focus on Southern India besides Delhi initially.

Air Asia’s entry will spur competition and expectedly, it has triggered a fare war, and since it benefits the passenger and may lure scores of first time fliers, the same needs to be welcomed.

Air Asia’s is a success story that was first unveiled in Malaysia and is the first to take advantage of relaxation of norms in India which is now the fifth country that the no-frills airline is starting domestic operations from.

The mother group is already known to be one of the best in the business launching several innovative business models. 

The entry in India of the new player, known for its aggressive pricing, was not without controversies.

Rival airlines brought pressure on the government in a bid to stop the airline from taking off. A court case was filed too but since there was no stay on it, the company was shown the green signal to launch operations. 

For Air Asia, the aviation scene in India is rather different from what it encountered in Malaysia.

The sustainability of the airline’s model will be in focus given the cost structure, which continues to be hostile. Four of the five carriers barring the IndiGo -- the largest domestic airline by market share -- are in the red and there is no silver lining expected in the near future.

Budget airlines have to fork out the same navigation and airport charges just as other full-service carriers do. That explains massive losses that the carriers in the country have piled up. One company – the Kingfisher Airlines – has closed down under the weight of losses it suffered. 

Still, interesting days are ahead for Indian aviation. While Air Asia’s path will be keenly watched, the Tata-Singapore Airlines venture is waiting in the wings to take off.

That the Indian carriers have placed orders for hundreds of planes including the regional carrier Air Costa, launched recently, amply indicates that there is future for the sector in a burgeoning economy.

The growth in the sector in the last decade was three times the growth achieved in the last five decades. However, the industry needs a helping hand to survive and is looking at the new government eagerly.