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Air-India to launch intl discount airline in 2005
Monday May 31, 2:34 am ET
NEW DELHI, May 31 (Reuters) - India's international flag carrier, Air-India Ltd , plans to launch a new discount airline in April 2005 to boost its share of the key Gulf and Southeast Asian markets, its spokesman said on Monday.
Jitender Bhargava said the new airline will be a wholly owned subsidiary of the state-run carrier and would fly from New Delhi, Bombay, Madras and the southern state of Kerala using a fleet of 14 leased Boeing 737-800 (NYSE:BA - News) planes.
"The aim is to have about 25 percent lower fares than offered by other international airlines," Bhargava said.
India has a large expatriate population working in the Gulf countries and has decade-old ties with Singapore and Hong Kong which drives air travel to the two regions.
The Gulf routes are also some of Air-India's most profitable, but the airline faces stiff competition in these markets, especially from discount airline Gulf Traveller launched by Bahrain-based Gulf Air in June 2003.
Bhargava said Air-India's board approved the plan for the new airline last week which will now be sent for government approval.
Bombay headquartered Air-India, whose privatisation was abandoned in 2001 due to lack of investor interest, has steadily lost market share to foreign airlines over the past 10 years because of its inability to increase capacity.
In October, its board approved the lease of two Boeing 747-400s and two Airbus A310s (Paris:EADS.PA - News) to increase services to Europe and the United States and begin flights to Shanghai. Those inductions would increase its fleet to 33 planes.
Air-India also has a plan to buy 10 Airbus A340 and 18 Boeing 737-800 planes as part of a five-year $2.2 billion fleet expansion and renewal programme, which also awaits government approval.
The 14 planes to be inducted by its subsidiary will be over and above Air-India's own purchase plan.
India's new aviation minister Praful Patel said last week he wanted to strengthen the two state-run carriers, Air-India and the mostly domestic Indian Airlines Ltd .
Air-India to launch intl discount airline in 2005
Monday May 31, 2:34 am ET
NEW DELHI, May 31 (Reuters) - India's international flag carrier, Air-India Ltd , plans to launch a new discount airline in April 2005 to boost its share of the key Gulf and Southeast Asian markets, its spokesman said on Monday.
Jitender Bhargava said the new airline will be a wholly owned subsidiary of the state-run carrier and would fly from New Delhi, Bombay, Madras and the southern state of Kerala using a fleet of 14 leased Boeing 737-800 (NYSE:BA - News) planes.
"The aim is to have about 25 percent lower fares than offered by other international airlines," Bhargava said.
India has a large expatriate population working in the Gulf countries and has decade-old ties with Singapore and Hong Kong which drives air travel to the two regions.
The Gulf routes are also some of Air-India's most profitable, but the airline faces stiff competition in these markets, especially from discount airline Gulf Traveller launched by Bahrain-based Gulf Air in June 2003.
Bhargava said Air-India's board approved the plan for the new airline last week which will now be sent for government approval.
Bombay headquartered Air-India, whose privatisation was abandoned in 2001 due to lack of investor interest, has steadily lost market share to foreign airlines over the past 10 years because of its inability to increase capacity.
In October, its board approved the lease of two Boeing 747-400s and two Airbus A310s (Paris:EADS.PA - News) to increase services to Europe and the United States and begin flights to Shanghai. Those inductions would increase its fleet to 33 planes.
Air-India also has a plan to buy 10 Airbus A340 and 18 Boeing 737-800 planes as part of a five-year $2.2 billion fleet expansion and renewal programme, which also awaits government approval.
The 14 planes to be inducted by its subsidiary will be over and above Air-India's own purchase plan.
India's new aviation minister Praful Patel said last week he wanted to strengthen the two state-run carriers, Air-India and the mostly domestic Indian Airlines Ltd .