The Hindu : National : Air India Express to be low-cost domestic carrier

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Sunday, Sep 02, 2007
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Air India Express to be low-cost domestic carrier

Ravi Sharma

Bangalore: With Alliance Air, the low-cost subsidiary of Indian being phased out in Air India-Indian merger, Air India is set to utilise its own budget airline ‘Air India Express’ as a ‘dedicated’ low-cost domestic carrier. This, rather than just a hop-on, hop-off service, could start the latest by October, according to Air India Chairman and Managing Director V. Thulasidas.

Air India Express, which has been Air-India’s value-for-money service providing connectivity on the short-range routes, with just one class (economy) of seats, already offers flights to major international destinations within a distance of around four hours from different cities in India. Most of the flights are quick-turnaround services with a ground time of around one hour at the respective destinations. Air India now wants to compete with the budget airlines using its reach and by route rationalisation.

More orders

According to Mr. Thulasidas, Air India is evaluating two routes — Thiruvananthapuram-Delhi and Delhi-Kolkata — for starting the Air India Express domestic service. Services on other domestic routes will follow as and when aircraft are available. “Of the 25 [Boeing] aircraft that we ordered, we have already taken delivery of 16. Two [Boeing 737-800s] are coming in September, while the rest should be delivered by the beginning of 2009. The 25 aircraft were originally meant for international operations but now we are going to utilise some for Air India Express’ domestic routes. As and when we want to increase Air India Express’ domestic routes we can place orders for more aircraft.”

Pointing out that a fleet review exercise was under way in Air India, he said that post-merger, Air India had an inventory of 112 aircraft. “We are looking at long-haul, short-haul, widebody and narrowbody aircraft. We are evaluating what we want. It could be any aircraft.”

Besides operations to the Gulf, Air India Express would, starting October, fly from Kolkata to a number of South East Asian destinations including Bangkok, Singapore and Kuala Lumpur.

Kolkata –Dhaka and Nagpur– Dubai operations were being planned. “We are also exploring the possibility of Air India Express flying to the Maldives, not from Bangalore or Thiruvananthapuram but from other Indian destinations; the Central Asian Republics and Phuket in Thailand. We can be competitive on any of the routes.”

The fares would on average be 25 per cent less than the ticket in the full service carriers. The airline already had a fair revenue model. “We are already offering substantial discounts on fares. On some tickets, fares are even 50-55 per cent discounted.”

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