The Hindu Business Line : AI board meet may consider low-cost airline

THE Air India (AI) board, which is scheduled to meet in Mumbai on Saturday is likely to have a re-look at the airlines proposal for setting up a low-cost airline.

Official sources while confirming that the issue of AI setting up a low-cost airline is to be discussed at the meeting refused to speculate on the outcome. Sources added that setting up a low-cost airline was not the only issue, which was to be discussed at Saturday's Board meeting.

The airline board had on April 21 this year also discussed the proposal but was unable to reach a final decision on the launch of a low-cost airline.

Sources at that time had indicated that the Election Commission code of conduct, which was in force at that time, did not allow the airline to make any major decisions till the elections were over.

Official sources had earlier indicated the need of AI launching a low-cost airline service on several routes including Chennai-Singapore, Chennai-Kuala Lumpur besides connecting cities in Kerala to the Gulf region.

AI first mooted the idea of having a low cost, no-frill airline on the Kochi-Gulf sector towards the middle of last year.

The proposal mooted then was to have the airlines 100 per cent subsidiary Air India Charters Ltd (AICL) operate a low-cost airline between India and the Gulf region.

The proposal if accepted would see AI join a host of global airlines, which have launched low-cost airlines. While in West Asia, the Sharjah-based Air Arabia has launched a low-cost airline there is also Air Asia in Malaysia, which offer air travel at very low fares.

However, both the airlines have yet not been given permission to start operations to and from India.

Sources indicated that even if the proposal for launching a low-cost airline is cleared at the meeting, it was unlikely that the airline will take wings before start before the first quarter of next year. The low-cost airline could eventually have as many as 14 aircraft and offer fares, which could up to 25 per cent lower than what is charged at present.