The much-awaited low-cost arm of Air India will not only fly from non-metro cities but also from Mumbai and Delhi.
The much-awaited low-cost arm of Air India will not only fly from non-metro cities but also from Mumbai and Delhi. The new business model aims to woo passengers of other low-cost carriers.
A source said that all the spadework for making the Maharaja’s foray into low-cost operations has been done already. The final launch is expected anytime next month. The airline plans to start flights throughout the day except peak hours.
The low-cost arm is an ambitious project as the airline is suffering massive financial losses. The decision to fly low-cost service in both non-metro and metro airports is taken to bolster the passenger load factor in all the routes.
“There is no point in starting low-cost flights only from non-metro cities because the main aim is to get passengers who otherwise travel by private low-cost carriers,” said the source.
Planning to cash in on the festive season ahead, the airline has worked out competitive ticket pricing in all the routes.
To tide over its massive losses, the cash strapped airline has sought a Rs10,000-15,000 crore bailout package from the Centre. Sources claim the government’s bailout package depends on the business plan the airline works out for itself.
According to Air India’s turnaround plan, 70% of flight operations would be in the
low-cost carrier mode in the coming years.
“The revenue model is being reworked and there is nothing more reliable than low-cost business model,” said the source.
Talking about the criterion of slotting no-frill flights, another source said: “There are two factors we have looked into. First, to get more passengers in sectors having poor passenger load, and second, the time slots which doesn’t impact the passenger load of full service flights of the airline.”
Initially, the airline has no plan to slot no-frill flights in early morning and late night. “Because during this time Air India flies full service flights. Initially, there will be
a gap between full-fare flights and the low-cost flights,” said the source.
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