Air India’s low-cost domestic service yet to take off

New Delhi: A plan by National Aviation Co. of India Ltd (Nacil) to launch a low-cost affiliate of cash-strapped Air India, the national flag carrier, to compete on domestic routes with private carriers has been tripped up by regulatory and financial hurdles.
The aviation regulator has refused to approve the launch of the low-cost service under the Air India Express brand on Indian routes because the integration of the four state-owned airlines under Nacil hasn’t been completed yet, said two Air India officials familiar with the development.
Nacil also doesn’t have the funds to complete the makeover of old aircraft into an all-economy configuration, said the officials, who spoke separately and didn’t want to be named because they aren’t authorized to speak with the media.
Air India, Indian Airlines, Alliance Air and Air India Express, which flies on some international routes, merged under Nacil in 2007, but they still operate under four different licences and four different firms.
Nacil had been planning to convert old Airbus SAS-made A320 aircraft belonging to Indian Airlines to an all-economy configuration to fly under the Air India Express brand. However, the Directorate General of Civil Aviation has objected to moving the aircraft because the two airlines operate under separate licences, known as air operator’s permit (AOP), said the Air India official cited above.
Some of the aircraft have already been configured to an all-economy version, said one of the two Air India officials cited earlier. After regulatory permission wasn’t forthcoming, the word Express that had been painted on the aircraft tail was erased. Some aircraft aren’t airworthy for lack of engine spare parts.
10/11/09 Tarun Shukla/Livemint

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Categories: Low Cost General Nov 2009, NACIL Nov 2009, New Nov 2009