Air India is planning to establish a low-cost subsidiary early next year that will operate on short-haul international routes using leased Boeing 737-800s.
The board at a 29 May meeting approved the establishment of a low-cost unit that will start services on 1 April 2005. It will operate flights from six airports in India to points in the Middle East and South-East Asia, charging around 25% less than other international airlines.
"There are two factors behind why we are establishing a low-cost airline. Firstly we know what is happening in the Gulf region and how airlines are being set up there. If they start flying into India with low fares then we have to be prepared for it. Secondly, we have huge pockets of consumers in India who are very price sensitive," says Air India.
The six Indian cities chosen are Chennai, Delhi and Mumbai as well as the three international airports in the southern state of Kerala: Calicut, Cochin and Trivandrum.
The operation will commence with six aircraft on 1 April with four more added in time for the start of the winter timetable and four more in the summer 2006 timetable, says Air India. By the end of the first year of operations, the new airline plans 127 weekly flights.
Air India says the 737-800 was chosen because it already has a proposal pending with the government to purchase 18 of the type. It says the yet-to-be-named low-cost carrier's 737-800s would be on operating leases and would be in addition to the 18 Air India plans to buy for its mainline operations.
LEITHEN FRANCIS / SINGAPORE
Source: Flight International
