Air India may fly all economy class on domestic routes

Air India, the country’s flag carrier may turn into an all economy class airline on domestic routes, in an attempt to accommodate more coach class passengers and fill its planes.
The move is aimed at regaining market share in the domestic airline space ceded to rival airlines including some low cost carriers. The company also aims to complete the integration of Air India and Indian by the end of this year.
Arvind Jadhav, one week into the job of chairman and managing director of National Aviation Company of India (NACIL), is piloting the new plans. “My first priority will be to help the airline to regain its market share it has lost to other low cost carriers such as SpiceJet, GoAir and IndiGo.” Air India had 17 per cent market share in the January-March 2009 quarter, according to Ministry of Civil Aviation data. “I have advised the company to offer low cost fares on the domestic routes and it will be a workable option,” outgoing Union Civil Aviation Minister Praful Patel said.
The Jet Airways and Kingfisher groups both offer low cost services under the Jet Airways Konnect and Kingfisher Red brands.
Rationalisation of routes is also on the cards. Air India has already rationalised flights between Mumbai-Los Angeles that was making Rs 200 crore loss annually. It has also cut capacity to Seoul in South Korea and Dar-es-salaam in Tanzania respectively.
Air India has made losses of over Rs 4,000 crore for 2008-09, due to decline in passenger traffic, economic downturn and huge fluctuation in aviation turbine fuel prices.
12/05/09 Rupesh Subhash Janve/mydigitalfc

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Categories: Low Cost General May 2009, NACIL May 2009