Air India, is planning to shore up its top-line by starting a low-cost carrier in the domestic sector, top airline sources said. The proposal is set to come up for the airline’s board’s consideration in its meeting on July 27.

“It has been proposed to overhaul Alliance Air’s current operations and turn it into a low-cost domestic carrier,” said a senior airline executive. Alliance Air is a fully owned subsidiary of Air India providing connectivity in the Eastern and North-Eastern sectors. “The emphasis will be on ‘on-time performances (OTP) and lower fares,” the executive said. Air India has a poor track record of OTP, and the latest (June) official data showed that it has slipped to the last spot in the domestic market.

The fleet of Alliance Air—which has a separate Air Operator Permit (AOP) from its parent company Air India — will be augmented by adding 14 Airbus 320 family aircraft from Air India (domestic). “These are the older aircraft, which are currently being under-utilised. Initially, four of these will be inducted in the Alliance Air fleet,” said the source. The fares for the low-cost model will be priced at levels below Air India (domestic). Air India is the only full service carrier in the country which does not have a full fledged low-cost domestic arm.

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