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IA to launch low cost carriers

The carriers will be operated by its subsidiary Alliance Air, reports Arun Kumar and Gaurav Choudhury.

india Updated: Oct 18, 2006 19:57 IST

Indian Airlines in its new avatar, has decided to take the competition unleashed by the new low cost carriers head on.

With its present market share down to 24.2 per cent, IA needs to fight back, and soon. Thus it too will soon start a low frills carrier service on regional routes, with flights of durations less than 90 minutes, using  smaller aircrafts like Canadian Regional Jets (CRJs), Bombardiers and ATR Turboprops.

It will be operated by its subsidiary Alliance Air and will operate on routes like Delhi- Chandigarh, Mumbai -Pune, Delhi - Jaipur, Mangalore-Bangalore etc.

The company intends to induct the aircrafts required - new six regional jets, and an equal number of ATR Turboprops  over the next two months. Regional jets and Turboprops normally have a seat capacity of between 50 to 70 passengers.

“Low frill does not mean there will be no hospitality at all. We shall offer light breakfast and other similar services”, Chairman and managing director of IA Vishwapati Trivedi told Hindustan Times.

“The idea of inducting smaller aircraft for shorter distances is to increase the occupancy and enhance efficiency”, he added. IA presently has an occupancy rate of above 70 per cent which is expected to increase in the winter season.

Simultaneously IA is also getting five leased Airbus A 320s for its regular services, while phasing out aircraft more than 15 years old. The average age of IA’s fleet currently is around 12 years, but with the induction of its new aircraft the average fleet age is expected to drop to about six years.

With 13 engine sent out for complete overhauling, facilities in India are working to over capacity. This will cost $ 3.5 million ( Rs 15.75 crore) per aircraft. Trivedi admitted that this has resulted in a strain on the company’s cash flow but was confident that IA would clock profits during 2006-07.

IA’s present market share is 24.2 per cent, which is expected to increase after the introduction of the low frill service and the coming winter season traffic.