Enticed by the success of India's first low-fare carrier, Air Deccan, and other new low-cost players in Asia, at least two more budget operators are being prepared for launch in India.
Late in June, drinks giant UB Group was the first to unveil plans for a new low-cost carrier to serve major domestic routes. Days later, local conglomerate Wadia Group announced similar plans. The moves come as a new Indian government is settling into power and facing intense pressure to ease restrictions over the domestic air transport sector to make it easier for new players to compete.
The UB Group plan is being taken particularly seriously by industry watchers. The group's chairman, Vijay Mallya, told reporters after a meeting with new civil aviation minister Praful Patel in New Delhi that the airline would be named Kingfisher after the group's brand of beer.
Mallya says eight Airbus A320s should be operated in the first year and a licence for scheduled passenger services is being sought. The licence of a small charter company owned by the group is expected to be converted into one allowing for scheduled operations under the Kingfisher name.
Plans call for the new airline to be based at Bangalore, operating on domestic trunk routes in competition with full-service carriers Air Sahara, Indian Airlines and Jet Airways, as well as with existing Bangalore-based low-cost carrier Air Deccan.
Air Deccan launched operations in August last year as the country's first no-frills carrier using ATR 42 turboprops serving secondary cities. Early this year it signed lease and purchase deals for seven A320s as part of a plan to serve key domestic trunk routes in competition with the full-service carriers. The first A320 was delivered in July configured in an all-economy-class layout seating 180 passengers. The carrier was established by Deccan Aviation, a charter operator, and is seen by many as having great potential for expansion. It is now in talks with several foreign groups interested in taking equity stakes.
Meanwhile, the Wadia Group is seeking approval to launch a budget airline of its own, although it is believed to be less advanced in its planning than the UB Group. It reportedly plans to operate regional jet aircraft on domestic routes. Wadia Group is a diversified conglomerate. At one point it owned an Indian air charter company, but sold it.
Industry observers see India as a good prospective market for budget carriers given the heavily populated country's growing middle class. Pressure is also now being put on politicians to reduce charges and taxes on the industry to bring down costs.
Low-cost airlines have also been taking off in South-East Asia and some have targeted the Indian market for their international services. Air India is planning to launch a low-cost international airline early next year, focusing on services to the Middle East and South-East Asia.
NICHOLAS IONIDES SINGAPORE
Source: Airline Business
