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Air India puts off domestic low-fare service launch to Nov

Air India puts off domestic low-fare service launch to Nov
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First Published: Fri, Sep 04 2009. 09 22 AM IST
Updated: Fri, Sep 04 2009. 09 22 AM IST
New Delhi: The country’s national carrier, Air India, has been forced to delay the start of its domestic low-fare service from this month to November as it’s in the middle of reassessing fleet plans, according to at least three company executives.
Click here to read a timeline of the Air India crisis
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, part of the carrier’s revival strategy, could further lower ticket prices.
The airline, seeking to emulate a recent move by Jet Airways (India) Ltd, wanted to convert 10 Airbus SAS A320 aircraft to an all-economy class configuration to launch its domestic low-fare service under the Air India Express brand by the middle of this month. The plan has been delayed by about two months as the airline reassesses its fleet, the officials said.
“The conversion has been put on hold,” said an airline executive who asked not to be named, referring to the removal of business-class seats. Most of the 10 aircraft are on lease and will require permission from the lessors for conversion. “That is one hurdle,” he said.
The delay may harm Air India as the peak festival season will be over by the time the carrier begins the service.
“They should have done it yesterday,” said Aloke Bajpai, CEO of travel site IXiGO.com, referring to the one-month peak festive season running up to Diwali that began early this month and finishes by end-October. “They would not really benefit from the current peak season but will have to wait for the summer season.”
The delay would come as a breather for rivals as the entry of another low-fare carrier was expected to bring fares down further at a time when Jet Airways and Kingfisher Airlines Ltd are struggling with losses.
Another Air India official, who sought anonymity, said the airline was reassessing its 147-strong fleet as it has to return some of its aircraft to leasing companies and that was leading to delays in the process.
The target for the domestic launch is now the winter schedule that starts at the end of October, the official said, adding the process “takes a little time” but that the plan for the low-cost service had not been shelved.
The carrier had on 7 August announced a three-year turnaround plan that included plans to start a low-fare service this month and gradually boost 70% of flights to all-economy ones.
An Air India spokesman declined to comment for the story.
Another Air India executive, who also did not want to be named, confirmed the delay, saying the airline was looking at increasing operations in the north-eastern parts of the country and this may be taken into account while starting low-fare services.
“We don’t know yet, nothing is in black and white,” this official said.
Rival full-service carriers Kingfisher Airlines and Jet Airways, 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.
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First Published: Fri, Sep 04 2009. 09 22 AM IST