Passengers are more eagerly awaiting the entry of AirAsia in India than the other stakeholders as they are hoping to get cheap air tickets. AirAsia is a low cost carrier that has been operating the short haul flights across the ASEAN region. It is fast emerging a potent force in the aviation circles that is known for its extreme efficiency and low cost flight booking service.
With almost everything else to pay for except the seat, the model of this LCC has been subject of many studies. The foray into India is being viewed with a lot of skepticism since the general environment for any carrier in India is not aviation-friendly. Recently it stopped operations from the two destinations in India due to high airport costs. With the same type of environment still existing, the entry of airline is being viewed with skepticism. Another important reason for this skepticism is that AirAsia has not been successful in all its ventures. It is only in Malaysia and Thailand that it is having operating profits but this is not the case with Indonesia. India can be expected to be an even more difficult market to operate on.
Among the top competitors of the airline, Spicejet and Jet Airways are prime candidates for getting foreign investments and this will further give a boost to their operation in the local and the short haul international flights market. Air India is also bolstering its arsenal as it is expected to get the bailout package from the government.
Besides these formidable competitors, the airline will also be putting up against the declining aviation traffic. This declining traffic is a major cause of concern since it limits the scope of growth of airlines. While increase is prices of tickets has been a major cause of decline of air traffic last year, expectations are high from AirAsia for offering cheap air tickets which might once again add to the traffic volumes.