Indian industrial conglomerate Wadia group, best known for its textile brand Bombay Dyeing, will launch a low-cost airline in October and is in talks with Airbus and Boeing Co. to buy 50 new jets, a company official said Friday.
The new carrier, GoAir, will operate with up to 22 used Airbus A-320 planes for the first two years, when deliveries of the new planes will begin, said Jeh Wadia, managing director of GoAirline (India) Pvt. Ltd.
"We want to be the lowest-cost airline in India," Wadia said, adding that his airline would target people who now travel in air-conditioned trains and overnight buses. "The used aircraft will be Airbus, but we are in talks with both Airbus and Boeing for 50 new planes. We will buy them over five to seven years."
Wadia's GoAir to offer lowest airfares
Wadia declined to divulge investment details, but 50 new mid-size aircraft typically cost about $3 billion at list prices.
The first flight will originate in Mumbai, where the Wadias have their head office, but its destination or other routes have not been decided, he said. Each plane is to offer 180 seats in a single class.
GoAir's purchase plans take the total number of aircraft to be acquired by Indian budget carriers in the next five years to 305.
For decades, air travel in India had been expensive and largely dominated by state-owned airlines. But several new budget carriers have been attracting first-time flyers and aviation experts expect business to grow by 25 per cent a year.
In the fiscal year that ended in March 2005, some 16 million plane tickets were sold in India. Budget carriers offer at least 30 per cent lower fares than big carriers and sometimes sell tickets for as low as $16.
Budget carriers cut costs by doing away with in-flight meals, adding more seats, selling tickets on the Internet and working with a small crew.
India's first low-cost carrier, Air Deccan, began operations in August 2003 and hopes to sell 4 million tickets in the fiscal year ending in March 2006.
SpiceJet and Kingfisher Airlines began operations in early 2005 and at least half a dozen other budget carriers plan to begin operations in the next few months.
The Wadia group is involved in textiles, chemicals, food, plantations, health care and education.
