LOW COST Airlines - Ready for Takeoff in India

The credit for setting up low cost airlines in Asia goes to Tony Fernandes of Air Asia. In 2001, Fernandes after selling his AOL Time Warner stock options, bought the two-plane airline in Kuala Lumpur, Malaysia. In 2004, Air Asia has eighteen planes. From twelve flights a day in 2001 Air Asia today flies hundred. It flies from Kuala Lumpur to Jakarta, Kuala Lumpur to Bangkok and has recently announced to add two more cities. According to published sources, Air Asia is eyeing China and India as well. The success of Air Asia rests on Fernandes' relentless efforts to cut cost. Flight attendants are paid to clean planes instead of special crews to cut cost and reduce the time spent on boarding at terminals.

The competition between low cost carriers in Asia is heating up. Thailand has seven low cost airlines and Singapore is going to be the home to three. Valuair, Singapore's first low cost airline started operations in July 2004 in the popular Singapore-Hong-Kong route (Refer Table II for comparison of fares between low cost and full service carriers in Asia). Tiger Airways, another low cost airline will be launched in end 2004. Qantas, Australia's national airline is planning to launch a low-cost subsidiary from Singapore soon.