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Air Asia Plans to Cease Operations to India and Japan

by Radhakrishnan Pattabiraman

Air Asia, Malaysia’s budget airline is reviewing its operations in India and Japan. The airline is going through some obstacles due to COVID-19.

Air Asia A320 © Airbus

India is a Different Market With Minimal Margins and Many Players.

Air Asia has been operating in India for a few years now.  While there are signs of revival after the COVID-19 pandemic and the aviation sector seems to recover, Air Asia is reviewing its decision to withdraw from the Indian market.

India is a different market, and there are many players who are having a big market share.  So, competing with the heavyweights is a challenge any player has to undergo.  In that sense,  Air Asia has announced that it is reviewing its business operations with the Indian Market.

Competition from similar airlines like Air Asia, GoAir and many other players lead to cut-throat competition and price war.  This has already led some players to exit the market

says an Aviation expert on conditions of anonymity.

Indigo’s Large Control Of Market

Indigo – a prominent, rapidly growing,  Low-Cost Carrier (LCC) from India – currently has a huge market share between 50-55 per cent.  Thus, the carrier has a stronghold in the country’s airline market share.

There are many players who aim to seize a portion of the market.  In that kind of situation, it is very difficult to operate with low margins.

Our businesses in Japan and India have been draining cash, causing the group much financial stress Cost
containment and reducing cash burns remain key priorities, evident by the recent closure of AirAsia Japan and an
ongoing review of our investment in AirAsia India,”

said AirAsia Group president (airlines) Bo Lingam on Tuesday for any airline.  Only recently,  Air Asia announced its exit from Japan.  This is an indicator of the cash crunch the airline has been going on.

One More Major International Low-Cost Carrier Exits from India.

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Airbus A320-216 AirAsia Malaysia © Macau Photo Agency

India is a challenging market for any airline.  The recent closure of Jet Airways and the proposed sale of Air India are all indicators of how the airline market operates.

Furthermore, the joint venture with the Tata Group has just yielded seven per cent market share for AirAsia. Tata has a joint venture, with Singapore Airlines (SIA) for their full-service flights.  SpiceJet the second biggest LCC of India has a 13.4 per cent.

Clearly, the Indian aviation market is undergoing a shake-up.  Only the fittest will survive.  Let us hope India shines!

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