Airlines need to extend cooperation with other carriers in business. But should they decide to choose or act in the manner of ‘survival of the fittest’, God save the rest!

SpiceJet's low offer of fare rate at Re1, with conditions attached, met a negative response from the Director General of Civil Aviation (DGCA), before others could even think of jumping into the band wagon and quoting similar rate. Of course, the lucky punters who booked their tickets at this ridiculous rate would still be able to enjoy this rate which is lower than the bus fare even in the remotest village in India!

Moneylife has had the opportunity to cover the stories of the domestic carriers who have been indulging in price wars, while all the time there was the spoke of huge burden of interest payments on their capital purchases and the heavy losses that they were incurring, year after year. If what they claim is true, why in the world should they commit suicide by offering uneconomic rates which presumably do not cover their break-even points?

It may be recalled that these carriers had tried their very best to prevent Air Asia getting the licence to operate. Obviously, they were so engrossed in attacking the Air Asia entry; they forgot the quiet welcome that Air Costa received, particularly in Andhra Pradesh, where it began to operate. Based in Vijayawada, Air Costa now services, with just four Embraer jets (from Brazil) cities like Ahmedabad, Bangalore, Chennai, Hyderabad, Jaipur and, of course, Vijayawada, which is its hub. In the last few days, Air Costa quietly added three more destinations like Coimbatore, Madurai and Vishakhapatnam in their flight plans.

According to Ramesh Lingamaneni, executive director of Air Costa, their plans involve acquiring four jets every year, and extend their plans to include other two and three tier cities and towns, while making an application for an all-India permit by the end of this year. They would prefer to be known as a well-knit regional operator and serve the customers.

Tony Fernandez, the global CEO of Air Asia had lamented on the pitiable action of the domestic carriers who had ganged up together and submitted petitions to DGCA to prevent the issue of licence to Air Asia. Although no official announcement has been made as to when this low-fare carrier will take off, it looks as though they are well set to start their operations in the next to six to eight weeks, at best.

Air Asia's flight paths and destinations to cover the Southern Region have not yet been announced; but it is certain that their plans positively include much better service and even cheaper rates than the low prices offered by Spice Jet, Jet Air, IndiGo etc. It has been reported in the press that Air Asia will offer upto 30% cheaper rates than these loss making carriers. They plan to avoid the expensive ports like Mumbai and Delhi but may stop over at Kolkata considering their proximity to their HQ in Kuala Lumpur!

Any guesses for the Southern cities they may cover? Our own predictions would cover Bangalore, Coimbatore, Cochin, Calicut, Goa, Madurai, Mangalore, Puducherry, Tanjore, Thiruvananthapuram,Trichy and Tuticorin, with Chennai as the hub!

We strongly believe that Air Asia would extend the hand of cooperation to live and let live with other carriers in business, but should they decide to choose or act in the manner of "survival of the fittest", God save the rest! Our own feeling is that Air Costa would do well to join forces with Air Asia to make customers in the South happy with timely service at competitive rates, where the customer is treated as king!

(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)