No-frills airlines to crowd skies soon

At least 10 new no-frills carriers are expected to start operations in the country over the next 18-24 months, according to the Centre for Asia-Pacific Aviation (CAPA).

Apart from this, international low-cost airlines, including Malaysia's Air Asia and Gulf's Air Arabia, are also expected to start services to India, with fares as low as 40 per cent of the existing rates.

According to CAPA, the new domestic airlines expected to start service in India are Air One, Indus Air, Royal Air, East West, Wadia, Kingfisher, Visa, Yamuna, Air India Express and the proposed low-cost service by Alliance Air.

Existing full service carriers like Jet Airways and Air Sahara are also expected to devise strategies to counter the onslaught.

Speaking at the low-cost airline symposium organised by CAPA, Peter Harbison, managing director, CAPA, said, "We will see more activity in this area with a large number of companies starting services."

Most of the new proposed cheap carriers are expected to be funded by private equity based on a startup model, and only a few will be backed by Indian business houses.

Domestic travellers will be the biggest beneficiary of the low-cost services since their entry is expected to kick off a price war. Most of the airlines are expected to price their tickets at rates as low as 50 per cent of the existing rates or even lesser.

According to Adel Ali, chief executive officer (CEO), Air Arabia, the airline wants to start services to various cities like Delhi, Mumbai, Hyderabad and some south Indian centres from the Gulf region, and is awaiting the government's approval.

Air Arabia's tariffs will be 20-40 per cent lower than the fares of other airlines currently operating in these sectors.

Similarly, Air Asia is also keen to start services to India. "We are expecting to take more aircraft into our service, which will be done after our initial public offer. India is one of the destinations we want to start service," said Bernard Francis, regional director, Air Asia.