The Hindu Business Line : Air India move on new airline launch soon

While AI is expected to take what is being called a "final decision" on whether to launch a low-cost airline on April 21, a high-powered committee of the IA is to submit its report on how the domestic airline can convert the existing threats into opportunities within the next few days.

The IA Committee, headed by a Deputy Managing Director, was set up in early February this year to look at various options in view of the Union Cabinet opening a small window of opportunity by allowing private sector domestic airlines to fly to the six countries of the South Asian Association of Regional Cooperation (SAARC).

It is widely expected that once a new Government assumes office at the Centre, the private sector domestic airlines will be allowed to operate around the globe, except the Gulf region.

The IA Committee is examining several issues, including taking stock of existing air service bilaterals, matching these with market demand and also examining the infrastructure (aircraft) which are available or needed by the airline to meet the market requirements.

Sources indicate that the work being done by the committee is nothing but a proactive role being taken by the airline and reengineering itself to meet the needs of the market.

However, even as AI works out the finer details of whether to launch a low-cost airline, questions are being raised on the efficacy of the project. Sources question the wisdom of AI launching a low- cost airline when the world over, such a venture has not been successfully launched by any big airline.

Another issue relates to why only the low-cost airlines should be allowed to operate under the AI bilateral when a similar right could be given to private airlines also.

Interestingly, the AI decision to set up a low-cost airline comes close on the heel of several airlines, including Gulf Air and Singapore Airlines, either launching or announcing their intention to launch low-cost airlines.

But even as the two state-owned airlines work feverishly to complete their work, a twist in the tale for AI and IA could yet again come from the Government.

While AI and IA may complete their studies soon, it is more than likely that the airlines will have to seek permission from the Government before implementing the reports, something which may take some more time.