Air India may enter no-frill segment in domestic sector through Air India Express

According to a PTI report, Air India may now enter the no-frill segment in the domestic sector to beat the downturn in the aviation industry after Jet Airways and Kingfisher Airlines launched their all-economy services to tap low-cost travellers. “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 can be a low-frill model. If a decision is taken, it has to be Air India Express (AIE) for the domestic sector. While only four per cent of India's population travels by air, in Malaysia it is 50 per cent,” a top NACIL official told PTI.

The official informed that Air India already operates its Low Cost Carrier (LCC) Air India Express 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 for low-fares and meet the challenges of falling passenger demand, rising operating costs and excess capacity.