Get ready for another fare war in the domestic aviation sector.
The soon to be launched low-cost airline, AirAsia India, will offer free tickets to woo passengers, the airline promoter Tony Fernandes said on Wednesday.
But before you start dreaming of an inexpensive vacation flying on a one-way AirAsia free ticket, it might be a good idea to read the fine print, as it is extremely unlikely that the entire journey will be as inexpensive as claimed.
Fernandes admitted as much at a press conference here, when he said that it would be very rare that a passenger would get a free ticket both ways at the start of the journey.
AirAsia is expected to take to the skies some time towards the end of the year.
So, why the free ticket scheme then?
“If my plane takes off with an empty seat, then that seat is gone forever. I rather get nothing for it, as my marginal costs are very few. The upside is that the traveller may have to pay back for the fare, he may buy food, he may buy an insurance or book a hotel with Expedia,” Fernandes said.
The airline’s promoter, who met the Ministers for Home, Finance, Commerce and Civil Aviation during his stay here, said that getting the No Objection Certificate and Air Operators Certificate for AirAsia India was “imminent”.
The airline requires both the certificates before it can start operations here.
According to Fernandes, who said he was “not here to take anyone’s market share”, this was the right time to enter the Indian market.
“Silly capital has gone out. Eight years ago, I said I will never come to India as there were crazy guys in this business who had too much money to throw away. They have lost all their money now. There is a bit of sensible business now. The Government is pro-business. And Chief Ministers are pro-people,” he added.
Fernandes also announced that the Group would enter the hotel and insurance business and is also looking to start a football club in India. He, however, ruled out getting into the cargo business.
“Insurance will provide travel, personal accident and health insurance. It goes into markets that are under served. My boys are working on it. I know India is one of their plans. But it is separate from the airline venture and is separately capitalised,” Fernandes said.
The airline’s newly appointed Chief Executive Officer Mittu Chandilya said he was bullish about the Indian aviation sector and added that that “AirAsia India would be much bigger than the Group.”