The flight, which took of at 3.44 PM, is being operated by a former IndiGo pilot Capt Manish Uppal with Diganta, a former pilot of the now-grounded Kingfisher Airlines, as the first officer.
The no-frills airline also operated a return flight to Bangalore from Goa late Thursday.
The $30-million Indo-Malaysian joint venture of AirAsia Berhad (49 percent), Tata Sons (30 percent) and Telstra Tradeplace (21 percent) is taking to skies a month after the regulator DGCA (Director General of Civil Aviation) granted permission on May 7 to launch its budget operations across the country.
Though a late entrant in the budget-carrier sector, the airline will be competing with its established rivals such as IndiGo, SpiceJet, Jet Lite, Go Air and the state-run Air India to garner a market share to sustain its business.The airline's introductory fare has triggered a price war among budget carriers, with IndiGo and SpiceJet announcing promotional and discounted fares on many routes they operate.
"Our long-term goal is that every Indian should have an opportunity to fly," Chandilya said.
The airline's parent company Air Asia operates direct flights from Kuala Lumpur in Malaysia and Bangkok in Thailand to Chennai, Bangalore, Kochi, Tiruchirappalli and Kolkata.
Earlier, AirAsia group chief executive Tony Fernandes tweeted "Tony Fernandes @tonyfernandes... Getting ready for the first flight. All passengers on board. Full flight. INDIA here we come."
"Tony Fernandes @tonyfernandes... How ironic Captain Manish formerly of Indigo commanding our first flight for AirAsia India to @MittuChandilya," he further tweeted.
The new entrant had late last month announced the opening of bookings for the inaugural flight and offered fares as low as Rs 990 for the Bangalore-Goa flight.
AirAsia India has launched its services more than 15 months after it announced a 49:30:21 partnership with salt-to-software conglomerate Tata group and Arun Bhatia's Telestra TradePlace to set up a budget carrier in the country, in February 2013.
Soon after it received flying licence from aviation regulator DGCA last month, the airline had said it will launch the services in 1-3 months.
AirAsia India, whose top officials have promised to offer low and competitive airfares, will focus on connecting tier-II cities to begin with, according to airline sources.
"Our airlines' fares will be about 35 per cent lower than the current market rates," AirAsia India Chief Executive Mittu Chandilya had earlier said.
(With PTI and IANS inputs)