Singapore 2010: AirAsia makes Indian move

AirAsia India.JPGYesterday, my colleague Ghim-Lay Yeo was in Kuala Lumpur talking to AirAsia and Tony Fernandes about the carrier’s plans to expand to India. AirAsia, together with its long-haul associate AirAsia X, is making waves in the regional low-fare market.

Along with China, India is a big market for the Southeast Asian low-cost carriers. India, with its expat communities in the region, is a major market for the airlines. The country is also growing as a tourist destination.

Australia’s Jetstar and its Singapore-based subsidiary are planning an expansion of their network out of Southeast Asia, including possibly long-haul flights.

That leaves the likes of Tiger Airways, Cebu Pacific, Mandala and Lion Air as those low-cost carriers that are still focused on the regional routes – and that is not necessarily a bad thing for them.

The long-haul low-cost model has not been proven sustainable yet, although AirAsia and AirAsia X will love to make that possible. So it makes sense to focus on the high-frequency short-haul routes.

What all of this – both long-haul and short-haul – means that these carriers pose an even greater threat to the full-service carriers in the region. The likes of Garuda Indonesia, Malaysia Airlines, Thai Airways, Philippine Airlines have to watch out.

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