Australian travelers are expected to benefit from the drop in plane fares as more competition heats in the aviation industry with the offer of AirAsiaX daily trips from Sydney beginning April 2.

The budget airline launched the new service with an introductory offer of a $99 one-way fare from Sydney to Kuala Lumpur. For the Sydney to Bali leg, a one-way ticket would cost $159 and it would be $139 for a one-way trip to resort haven Phuket in Thailand.

The three are just among the 80 Asian destinations that AirAsiaX would offer Aussie passengers at lower fares. Besides flying from Sydney, AirAsiaX has existing trips to KL from the Gold Coast, Melbourne and Perth.

Three months after AirAsiaX starts its Australian operations, Scoot, the budget carrier of Singapore Airlines would also offer competitive rates from Sydney to Singapore.

The Malaysian government initially blocked the Sydney-KL route to protect Air Malaysia from competition posed by the budget carrier, but eventually gave AirAsiaX the permission.

With the new Sydney service, AirAsiaX announced last week the suspension of its flights to Europe and India in 2012 to concentrate on its Australasia, China, Taiwan, Japan and Korea operations which it considers its core markets. The decision is also seen as a response to the expected contraction of the European passenger market as travelers from the continent react to the debt crisis by cutting on travel.

AirAsiaX will use the Airbus A330-300 jets which have 12 Premium fly flatbed seats and 365 economy seats.

The discounted fares from Sydney went on sale beginning 2 p.m. of Wednesday and will be available until Jan 22. The lock-in travel dates for the cheap tickets are from April 2 to Oct 27.

Operators of the Sydney Airport welcomed the entry of AirAsiaX to New South Wales as its addition is expected to boost the state's economy by more than $140 million a year.

"The arrival of AirAsiaX in Sydney shows that our aviation market is extremely strong and that Sydney is in prime position to take advantage of the strong growth of emerging markets in southeast Asia," Sydney Airport Chief Executive Officer Kerrie Mather said in a statement.

The new service is also expected to benefit Asian travelers who want to visit Sydney's beaches, nature and scenery, shop and dine in the NSW city. Sydney is Australia's biggest outbound leisure market with 3.1 million passengers in 2011.

The airport executive said the introductory plane fares of AirAsiaX were not imaginable five years ago and attributed this development to the growth and more competition in the low-cost market which provide budget conscious passengers with more choices.

For Australian travelers, it opens the door for more affordable flights to other Asian destinations such as Bangkok, Jakarta, Surabaya, Medan and Ho Chi Minh using AirAsiaX's Flu-Thru transfer service. The service permits travelers to by two flight sectors and transfer easily to their final destinations via KL.

As a result of the stiffer competition, even Qantas has lowered its plane tickets to prevent the exodus of corporate customers to Virgin Australia. Besides the lower ticket prices, air travelers have also moved in significant numbers to other airlines because of the labor row that hit Qantas in 2011 which resulted in flight disruption to thousands of passengers.

An index prepared by the Bureau of Infrastructure, Transport and Regional Economics said that Qantas business class tickets went down by 27 per cent in the last two months, The Sydney Morning Herald reports. The fare cut for Qantas business class seats between Sydney and Melbourne averages $100. At the same time, the embattled flag carrier also rolled out a fourth tier or business class prices to counter the stiff competition from rival airlines.

To further boost competition and eat up into Qantas' shrinking passenger market, Virgin Airways announced on Tuesday that it would offer beginning May 15 two daily trips between Melbourne and Perth using A330 jets. The new service is expected to attract business travelers.

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