Mumbai : State-run Air India is mulling expanding operations of its international low-cost arm AI Express in the domestic market, where three budget carriers dominate the space and AirAsia India also expected to compete by year-end with launch of its operations here.
The flag-carrier has recently set up a three-member committee to explore the feasibility of such an expansion plan and also review the routes of the two carriers, to leverage synergies and avoid eating into each other’s market shares. “Air India has set up a committee and mandated it to explore the possibilities of Air India expanding its operations in the LCC (low-cost carrier) segment,” highly placed AI sources told PTI.
AirIndia regained the third slot with 19.2 % market share beating budget carrier SpiceJet (17.5 %) in July. At the same time, Delhi-based IndiGo continues to retain its leadership with 29.5 % market share in the month.
However, the three low cost carriers-IndiGo, SpiceJet and GoAir combined enjoy 55.5 % market share as against 44.5 % of the two full service carriers — Jet Airways group and Air India.
Air India Express operates 172 flights a week across Southeast Asia and the Gulf region with a fleet of 21 Boeing 737-800s, and commands 5-6 % market share. Of its planes, 17 are owned, and the remaining leased and majority of its flights originate from Kerala, which contributes over 50% of its income.
According to a report by Centre for Asia Pacific Aviation (CAPA), the domestic traffic is expected to expand by 4-6 % this fiscal, with most of it occurring in the second half.