Air India mulling no-frill service through AIE domestically

MUMBAI: After domestic private air-carriers, Jet Airways and Kingfisher launched their all- economy services to tap low-cost travellers, state-run Air India may now enter the no-frill segment in the domestic sector to beat the downturn in the aviation industry.

"We don't see a turnaround in the industry at least before two years...we have to look at different business models. One of the options could be a low-frill model...if a decision is taken, it has to be Air India Express for the domestic sector" a top NACIL official said.

While only four per cent of India's population travels by air, in Malaysia it is 50 per cent. Air India is exploring different business models to beat the downturn and one of the options could be the low-frill model, the official said.

Air India already operates its low-cost Air India Express (AIE) service on the Gulf and South-East Asian routes from several destinations in the country.

So far AIE has not entered the domestic sector, even though it has been planning to do so for quite some time.

But now it has been forced to look at this option seriously as in the current situation a business model has to be evolved that is, "low-cost, low-fare and meets the challenges of falling passenger demand, rising operating costs and excess capacity," the official said.