Breaking its silence over the approaching launch of AirAsia, budget carrier IndiGo said it welcomed greater competition but urged the government to ensure a level playing field for all airlines.

Aditya Ghosh, president, IndiGo, India's biggest airline by passengers carried, told ET that any kind of competition is good as it "keeps us on our toes". "It also helps policy and customers."

All the same, there should be a level playing field for Indian carriers to do well,  Ghosh. "If an Indian carrier wants to fly overseas, it has to wait for five years. Indian carriers must seek permissions every summer and winter for routes. These things don't apply to a foreign carrier."

The government permitted AirAsia, Malaysia's biggest budget carrier, to establish a passenger airline partnering theTata Group last month. It is due to start operations later this year. The operations of IndiGo and AirAsia are strikingly similar. Both are genuine low-cost operators, with a track record of keeping their planes almost continuously in the air and their point-to-point network.

Yet, there's a key difference that might hurt IndiGo's dominance in the Indian skies. AirAsia is renowned for its cut-price fares, whereas IndiGo's fares have been anything but low in recent months: it charges more than even a full-service airlines such as Jet AirwaysBSE 2.77 % on many routes.

But Ghosh said his airline's fares were market-driven. "With each carrier having to manage its own yields, diverse cost structures and different focus, some prefer profitability, others market share. The charges tend to be different."

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