AI’s low-cost service to expand in phases

Mumbai: National Aviation Company of India (Nacil), which runs flag carrier Air India (AI), has gone back to the drawing board to study new domestic routes to introduce low cost arm Air India Express in phases, say Air India officials.
The first phase of low cost expansion is estimated to be completed within six months to cash in on the boom of low cost travel in India and the airline might deploy more capacity in the north region, the AI officials said.
Air India CMD Arvind Jadhav had in late 2009 said the carrier will deploy nearly 27% of its domestic capacity on its low cost subsidiary. However, analysts say that the carrier will not have the first mover advantage as arch rival Jet Airways had when it introduced JetKonnect in 2009 with fares lower by 15% than its full-service carrier. However, the Indian aviation market is growing exponentially and each operator can grab a decent pie from it. Air India COO Gustav Baldauf recently said, “Low cost carriers play an important role. We will tackle the market in different levels. LCC as a business model is a part of the total restructuring concept.”
Meanwhile, Air India Express' website also emphasises that Air-India Express, based on market-trends, will be introducing many new destinations, international as well as domestic.
02/09/10 Shaheen Mansuri/Financial Express

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Categories: Air India Budget Sep 2010, NACIL Sep 2010