Chennai, Feb 23 () : Spice Jet is in talks with Singapore-based Tiger Airways to act as feeder service in the domestic routes. Spice Jet airlines’ shares lost sheen after the Air Asia-Tata proposed airlines decided to make Chennai its hub.
Spice Jet set off a fare war which led to Jet Airways, Indigo and GoAir to follow suit. The national carrier too followed. Malaysia-based Air Asia’s entry into Indian domestic market with Tata and Mittal for company has set alarm bells ringing for south-east aviation companies.
Tiger Airways hub is in Hyderabad and it now wants to tie-up with Spice Jet which is connecting major towns in the South to align its services to get passengers to travel through their services to Singapore. Those travelling from towns in Andhra Pradesh can use Spice Jet to connect to Tiger Airways.
Similarly, Tiger Airways is to strike a deal with IndiGo, another low-cost carrier which connects too many smaller towns. Known as the spoke and hub method, the two domestic carriers are expected to act as connecting flights to the international carrier which has eighty percent seat capacity utilization in the Indian route.
Air Asia-Tata proposal is coming up before the Foreign Investment Promotion board this month end. Air Asia’s Tony Fernandez reacting to doubts about the airline paying airport user charges and making profits with highest tax on aviation fuel clarified that his airline would not touch Delhi and Mumbai which has the highest user fee and instead operate from other airports.
His aim is to target the one lakh million rail travellers which means that the tickets would be slightly higher or on par. Meanwhile, Union aviation minister said that some Japanese airlines were too interested in tying up with Indian airlines.
The Etihad-Jet stake deal is facing problems since the Gulf telecom Etelsat lost millions in the telecom spectrum deal due to flip-flop of the Union Government. It wants a firm commitment from the ministry that there will be no change in policy.