AI Express to turn value carrier

National Aviation Company, the name of the proposed merged entity of Air India and Indian Airlines, plans to launch a value carrier to take on the challenge from Naresh Goyal's JetLite, formerly Air Sahara, and Air Deccan, which announced that it would be changing its budget carrier positioning after Vijay Mallya recently acquired a 26 per cent stake.

To this end, international budget carrier Air India Express and Indian Airlines regional subsidiary Alliance Air would be merged into a business unit under National Aviation Company and re-launched as an integrated value carrier on both domestic and international routes, said a senior Air India executive. An announcement to this effect would be made by the minister for civil aviation soon, the executive added.

A value carrier is a business model positioned between a full-service and budget carrier. This would mean that this airline would offer some "frills" including water and snacks.

Earlier, Air India chairman and managing director Vasudevan Thulasidas announced that Air India Express would be operating in "justifiable domestic routes" after merging another PSU airline Alliance Air with the former.

The merged airline would be flying more domestic destinations. "The main focus would be offering seamless domestic connections to the international gateways, besides low-cost operations," sources added.

A senior Jet Airways official said, "There is enough space for value carriers. High-end passengers of existing budget carriers will continue to fly JetLite."

JetLite will be operating as a value carrier in domestic routes as well as international routes. "JetLite will pitch for the Gulf routes apart from short-haul international routes such as Kathmandu, Colombo and Singapore," the executive added.