Air India To Launch Discount Airline

May 31, 2004
India’s international flag carrier, Air India, plans to launch a new discount airline in April 2005 to boost its share of the key Gulf and Southeast Asian markets, its spokesman said on Monday.

Jitender Bhargava said the new airline will be a wholly owned subsidiary of the state-run carrier and would fly from New Delhi, Bombay, Madras and the southern state of Kerala using a fleet of 14 leased Boeing 737-800 planes.

“The aim is to have about 25 percent lower fares than offered by other international airlines,” Bhargava said.

India has a large expatriate population working in the Gulf countries and has decade-old ties with Singapore and Hong Kong which drives air travel to the two regions.

The Gulf routes are also some of Air India’s most profitable, but the airline faces stiff competition in these markets, especially from discount airline Gulf Traveller launched by Bahrain-based Gulf Air in June 2003.

Bhargava said Air India’s board approved the plan for the new airline last week which will now be sent for government approval.

Bombay headquartered Air India, whose privatization was abandoned in 2001 due to lack of investor interest, has steadily lost market share to foreign airlines over the past 10 years because of its inability to increase capacity.

In October, its board approved the lease of two Boeing 747-400s and two Airbus A310s to increase services to Europe and the United States and begin flights to Shanghai. Those would increase its fleet to 33 planes.

Air India also has a plan to buy 10 Airbus A340 and 18 Boeing 737-800 planes as part of a five-year USD$2.2 billion fleet expansion and renewal program, which also awaits government approval.

The 14 planes to be introduced by its subsidiary will be over and above Air India’s own purchase plan.

India’s new aviation minister Praful Patel said last week he wanted to strengthen the two state-run carriers, Air India and the mostly domestic Indian Airlines.

(Reuters)
******

Source: http://news.airwise.com/stories/2004/05/1085996216.html

Hey Sandy….how about you whip a c/s on this. They will most likely operate A320s.