Air-India's no frills airline aims at March 2005 launch

The country's international carrier Air-India is expected to launch its low cost airline by March next year.

The proposed airline would be a fully owned subsidiary of Air-India with New Delhi as its headquarters. However, the operations and services hub would be in Kochi.

The blueprint for creating a new low cost carrier, which was presented at Air-India's board meeting on April 21, proposes a fleet of Boeing 737 800s and Airbus 340s, with six aircraft to be inducted in the first phase of operations.

"Our plans are ready and we will be able to start operations within ten months of receiving approvals," said a senior civil aviation ministry official adding that Air-India is likely to present a final plan to the board in its next meeting.

Besides, the low cost carrier will fly not only to the Gulf but also to Southeast Asia, while cutting down on frills. Airline services may not be offered free.

Moreover, the airline will start operations from all international airports of the country. However, it is not sure whether the new airline will take over Air-India's existing operations to the Gulf and Southeast Asia.

According to sources, the airline plans to connect Dubai Singapore, Jakarta, Bangkok, Kuwait, Doha, Bahrain, Alain and Salalah and other cities where there is a high concentration of Indians.

The low cost carrier, which will be called Air-India Charters Ltd,will function as a full-fledged airline with its own chief executive officer and support staff. The plan advocates a Rs 10 crore equity base with the remaining Rs 85 crore to be raised through loans to meet the start-up costs.

It is also proposed that while the crew and other support staff will be new, Air-India will part with some of its top officials to manage the airline.

According to officials, the low cost airline plant to cut cost in terms of manpower and other flying expenses.

"The main reason to float a separate airline for this purpose is to cut cost. The present manpower cost of Air India is not suitable for a low cost flyer. There needs to be a separate company with a separate staff for this," said the official.