AirAsia’s low-cost model won’t work: SpiceJet COO


Barely a month before AirAsia India finally takes off, the air is thick with barbs and potshots. Three days after Tony Fernandes took a potshot at India’s biggest carrier IndiGo on Twitter, the chief of AirAsia’s other Indian rival criticised its low-fare model saying it won’t work in the face of high costs in India. Sanjiv Kapoor, COO of SpiceJet, said AirAsia’s low-cost model won’t work in India in the face of high costs.

“There is one way to offer fares lower by 30-35% than market rates; that is to have a 30-35% lower cost structure. Given fuel and other costs are similar for all players in India, that kind of cost advantage can only come from lower aircraft and asset costs. You can have that kind of cost advantage if, maybe, part of your costs are reflected in Kuala Lumpur and not in India,” Kapoor told reporters at a press conference in New Delhi.

Read more at Economic Times


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