Air India Express, the low-cost arm of state-owned Air India, will be made a separate company as the airline looks at ways to manage its costs better. The airline will appoint a CEO to come on board within the next fortnight for the no-frills venture. “We have been trying to find someone who can dedicatedly head Air India Express. Six candidates have been short listed and the name would be announced in a couple of weeks,” said Gustav Baldauf, Chief Operating Officer, Air India.
According to a report in Economic Times, as part of the restructuring, Air India Express — that currently flies to destinations in the Gulf and South-East Asia — will tap the domestic market and provide connectivity within the country by March 2011. “By next summer schedule, restructuring operations of Air India Express will be complete and it will fly to domestic destinations too,” said Baldauf, adding that, it will help save costs. The National Aviation Company of India Limited (NACIL), that runs Air India, will also set up two MRO (Maintenance, Repair and Overhaul) facilities in Thiruvananthapuram, Kerala for the low-cost venture.
“About 25 aircraft will be based out of Kerala and two MROs will be sufficient to maintain them. The only problem is finding skilled manpower and we will have to recruit around 500 more people down south for this,” said Arvind Jadhav, Chairman and Managing Director, Air India. However, they did not disclose the expenditure to be incurred for setting up the facilities.
“We are eyeing a share of 30 per cent in the domestic market and we plan to have 40-50 aircraft in Air India Express fleet in the next three years,” added Baldauf. Currently, Air India Express has around 100 weekly flights out of southern cities. The airline was established in May 2004 and started operations in April 2005 with a flight from Thiruvananthapuram to Abu Dhabi. Regarding cancellation of several Air India Express flights recently, Jadhav clarified that August-October is a lean period when there are less bookings. Hence, even if flights are cancelled, passengers will be put on to other airlines.
“About 75 per cent load factor is profitable. But for lean season, we fly even if it is around 50-60 per cent. If the load factor is only ten-12 per cent, it makes business more sense to put passengers on other flights, than to operate an entire aircraft,” added Jadhav, denying cancellation of Air India Express flights on shortage of cabin crew. Jadhav made the statement against the backdrop of severe criticism from various sections in Kerala, including the large chunk of expatriates, besides politicians and business people.
The matter was also raised at a recently held meeting of the Parliamentary Consultative Committee, chaired by Civil Aviation Minister Praful Patel. The Air India Express had cancelled 95 flights on the Kerala-Gulf route in the past few weeks. Currently, Air India Express operates over 100 flights to destinations like Dubai, Sharjah, Abu Dhabi, Al Ain, Muscat, Salalah, Bahrain, Doha and Kuwait from Kozhikode, Kochi and Thiruvananthapuram.