New Delhi: India’s flag carrier, Air India, is converting 10 Airbus aircraft to an all-economy class configuration as it prepares to start its domestic low-fare operations under its Air India Express brand by mid-September, two airline executives said.

Air India, run by National Aviation Co. of India Ltd, currently operates Air India Express as its international low-fare carrier. Its entry into the domestic low-fare aviation market could further lower ticket prices.

Rival full-service carriers Kingfisher Airlines Ltd and Jet Airways (India) Ltd, India’s largest private airlines, have already shifted at least half their fleets to all-economy flights as they fight competition from discount airlines such as SpiceJet Ltd, InterGlobe Aviation Pvt. Ltd-run IndiGo and Go Airlines (India) Pvt. Ltd-run GoAir.

“A decision has been taken to convert old aircraft to all-economy class and they will fly under Air India Express,” an Air India official said, asking not to be named.

The 10 aircraft to be converted date back to between 1989 and 1994 and have 148 seats each. Over the next two months, these will be redesigned to have 168 seats, he added.

The conversions will take place at the Mumbai and New Delhi airports, two key bases for the carrier. To start with, seven aircraft will be converted and tickets can be purchased from the Air India Express website.

“It’s (launch) is aimed at middle of September,” said another official, adding that the exact date would depend on the time taken to reconfigure the aircraft.

Typically, aircraft that undergo a change in configuration or are retro-fitted have to be recertified by the manufacturer, in this case Airbus SAS, if there is a drastic change in the specifications, he said.

For the new domestic service, Air India will pull out its full-service domestic flights on some routes to accommodate the low-fare flights, the official said.

For example, an afternoon slot on the Delhi-Mumbai route, which may not be in high demand from business-class fliers, will be allotted to Air India Express.

Air India flies 57 of its 147 aircraft on domestic routes and has seen its passenger market share scroll down to 17% now from 20% in 2006-07.

But unlike Jet and Kingfisher, who are trying to regain corporate passengers who have migrated to low-fare airlines because of company policy, Air India can benefit from this model only if it cuts overall costs, said an analyst tracking the Indian aviation sector.

“If this is one element of a much more comprehensive revamp, then aggregate of all that may make a difference. But this move in itself may not have a big impact,” said Rishikesha T. Krishnan, professor of corporate strategy and policy, Indian Institute of Management, Bangalore.

“You are not going to see major expansion of the (passenger) market. Air India can only hope that they will get a slice of other LCCs (low-cost carriers).”

tarun.s@livemint.com