Kalanithi Maran promoted low-cost carrier SpiceJet is not ‘too worried’ about the impending entry of AirAsia, its CEO Neil Mills said, in what is the first reaction since the Malaysian budget airline announced in February its JV with Tata Sons.
AirAsia having made its intentions public that it will focus on catering to the market in south India before spreading its wings to a pan-Indian presence, made many analysts to reason that SpiceJet, with core of its operations in the south, will be impacted the most by the entry of AirAsia.
Neil Mills said AirAsia might find it difficult to replicate a model of charging for every value-added service in India like it does elsewhere, which allows AirAsia to keep costs low. India’s civil aviation sector is governed by an archaic Civil Aviation Act of 1937, an era when the concept of low-cost did not exist at all. The 1937 Act did not envisage the low-cost model and that law stipulates what governs what the airlines can do and (can) not do in India.