Malaysian budget carrier AirAsia’s share of traffic from India to its base has increased to 54% this year from 44% in 2012, a growth attributed by analysts to contraction of the total market as well as its smart network strategy and promotional fares.
AirAsia ferried close to 272,627 passengers on India-Malaysia route last year, according to data released by the Sydneybased CAPA-Centre for Aviation. However, its onward traffic originating from India to Indonesia, Singapore, Vietnam and Thailand has surged by more than 10 times to 18,435 passengers this year.
The carrier competes with Thai Airways, Malaysian Airlines, Tiger Airways, Jet AirwaysBSE 1.57 % and Air India.
The total market has contracted to 495,701 until August-end this year from 622,656 in the corresponding period in 2012.
“The airline’s success has been due to the fact that it has been able to create a traffic segment from south India to South Asia. Just as it uses feeder traffic from Bangkok to spread to its international network, it will most likely set up its India network to complement its network out of the country,” said Suraj Nair, senior vice-president at Thomas CookBSE 0.35 %.
AirAsia plans to start a domestic carrier in India next year in a tie-up with the Tata Group and private investor Arun Bhatia. The carrier on Wednesday announced an offer to give one million free seats for flights across the world, including to Indian destinations such as Kochi and Trichy.
On other flights, it introduced all-inclusive fares as low as Rs 5,000 from Chennai to Kuala Lumpur, Rs 3,820 from Chennai to Bangkok, Rs 4,000 from Kochi or Trichy to Kuala Lumpur, Rs 6,000 from Bangalore to Kuala Lumpur, Rs 5,000 from Kolkata to Kuala Lumpur and Rs 3,320 from Kolkata to Bangkok for travel between January and August 2013.
AirAsia has a very efficient revenue management system and it regularly gives such fares six to nine months in advance, said Nair.
In comparison, a Jet Airways ticket from Delhi to Kuala Lumpur for travel in the first week of January is available for Rs 21,931 while Malaysian Airlines is charging Rs 21,490.
A senior executive with an Indian carrier said on the condition of anonymity that AirAsia managed to beat its competitors on prices because of its drastically different cost structures.
AirAsia operates 43 weekly flights to Kuala Lumpur from Chennai, Trichy, Bangalore, Kochi and Kolkata, cities which are not connected by most other airlines on the India-Malaysia route. It has increased its Kolkata flights to one a day and twice daily to Trichy.
The airline’s subsidiary, Thai AirAsia, operates 12 weekly flights from Bangkok to Kolkata and Chennai.
The traffic for the airline comprises of small-scale traders and visiting friends and relatives, said Arup Sen, executive director of travel company Cox & Kings.
AirAsia has had an exclusive global tieup with Expedia for its flights to all destinations including India, but now it is tying up with other travel agents such as Makemytrip, a move that analysts say is likely to give a further boost to its sales. Yatra.com will start selling AirAsia tickets on its website next month, said the online travel agency’s president Sharat Dhall.