A price war in international air travel is imminent with several Asian low-cost carriers receiving or applying for permission to fly from their countries into India.
The airlines include Tiger Air (a joint venture between Temasek Holdings and Singapore Airlines), Thailand-based private carrier Nok Air, Indonesia's Lion Air, United Arab Emirates's Ras Al Khaima Airlines, Malaysia's Air Asia and Saudi Arabia's Sama Airways.
Last week, Tiger Air received permission to fly six cities in India from Singapore, which include Chennai, Goa, Cochin, Kozhikode, Trivandrum and Kolkata, and is expected to start flying in the next few weeks. Nok Air has started daily flights from Bangalore to Bangkok at a return fare of less than Rs 10,000 from June first week.
RAK Airlines, which was set up in 2006 as the fourth carrier from the United Arab Emirates, will start operations to Mumbai, Delhi, Trivandrum, Kochi and Bangalore. And Air Asia founded by the maverick Tony Fernandes is looking at flying from Malaysia to Kolkata.
Said a RAK executive who was in Mumbai for a conference organised by the Centre for Asia Pacific Aviation, "We are interested in flying Indian destinations, including secondary cities." Added a Nok Air executive, "We are looking at tourist locations in India."
Industry experts say that the operation of low-cost carriers in the international skies would bring down prices by at least half to 75 percent. For instance, a ticket between Bangkok and Kolkata could cost as little as $50.
"With a clutch of low-cost carriers planning to fly from west Asia and south east Asia into India, airfares are likely to go down dramatically and it will stimulate the international travel market just like what happened in the domestic skies," said Kapil Kaul, CEO, CAPA.
Kaul predicts that the price war and the dramatic changes in the international market would be felt in April next year when all these carriers start operating in India. The international traffic out of India is expected to grow 15 percent next year.
The new entrants will have to compete with domestic Indian carriers like Air India Express, which operates low-cost flights to the Gulf, and Jet Lite, formerly Air Sahara which was recently acquired by Jet Airways, which will fly various destinations in west Asia as a 'value carrier'.
At the moment, there are two budget carriers that operate from India Iran's Jazeera Airways and Sharjah-based Al Arabia.
