Why IndiGo, SpiceJet don't see threat from AirAsia

Moneycontrol Bureau

Even as AirAsia is all set to start an airline in India after clearing political hurdles, domestic carriers like Indigo and SpiceJet do not see it as a threat to their existence.

For instance, Indigo's CEO Aditya Ghosh believes his airline's business model is quite strong along with a great hardworking team which is working on building a long-term sustainable business. "If you focus on someone else, you lose focus on what you are trying to do. We are focused on bringing 18 planes over the next 18 months and keep growing from there," he told Business Standard newspaper.

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He further said that AirAsia has sharp bunch of people who are running a good airline. He also said that the carrier is running a successful business globally, keeping cost low.  "Those who have kept prices high need to worry," he added.

SpiceJet's Neil Mills had in a recent interview with CNBC-TV18 clarified that Indigo can never be a threat to the airline due to the strong sustainable low cost business model of the company.

Also, Bank of America Merill Lynch in its April report said that it does not see any meaningful impact of AirAsia until second half of FY15 due to fact that AirAsia is usually cautious in difficult markets. There could be procedural delays in getting the required licenses by around two quarters, said the global investment firm.