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Rediff News  All News  » Business » AI finalises low-cost domestic flight plan

AI finalises low-cost domestic flight plan

October 28, 2010 01:39 IST

Air India Express, the international low-cost arm of National Aviation Company of India Ltd, has finalised a blueprint for the launch of cheap-fare domestic routes. The plan includes shifting base from Mumbai to Kochi, rebranding to Express India and improving the utilisation of its 21-strong fleet from 9 hours to 12.5 hours daily.

The foray into domestic low-cost operations will begin next April, with initial flights largely connecting southern cities to the rest of the country. Among the routes planned are Kochi-Hyderabad-Bhubaneswar-Kolkata and Kochi-Ahmedabad-Jaipur. The airline's strategy is clearly to put in place the spokes to smaller cities while still flying between the major hubs.

To compete with other low-cost carriers, which sell a large part of their tickets online, Air India Express is also developing an Internet ticketing system that adjusts fares based on demand. It does not currently have a dynamic system and charges a standard fare irrespective of when you buy a ticket.

"To be priced competitively and rationalise our fares, we need an Internet-based dynamic fare system. As of now, our fares are calculated manually and lacks dynamism, which is a must to compete with others," said an Air India official.

 "It would always make sense for AI Express to shift its headquarters to Kerala and our decision to shift it to Kochi is purely commercial. Kochi is centrally located, is the business capital of the state and a lot of people travel there on business," said a senior Air India official, who did not want to be identified.

"Our plan is to make Kochi our hub and route our operations from there, but Trivandrum will continue to receive a large number of flights," the official added. Kerala is a major market for Air India Express, as the airline operates around 50 per cent of its 204 weekly flights from the state.

The airline's officials also confirmed that the name change would be cleared by the board at a meeting before the winter session of Parliament.

The Air India Express plan for the domestic market entails 10 per cent capacity addition through better utilisation of the existing fleet. 
"By increasing our fleet utilisation to 12.5 hours a day from the current 9 hours, we will get enough additional capacity to smoothly run the domestic operations. It is like having two new airplanes for free," said the official.

Low-cost carriers like Malaysia's Air Asia X utilise aircraft for 18 hours. Air India Express serves 13 international and 14 domestic destinations with a fleet of 21 Boeing 737-800s. The airline has no plans to add any more international destinations soon.

Mihir Mishra