Air-India has set up a committee to draft a comprehensive report that would identify routes, which can be transfered from A-I to Air India Charters, the low-cost airline subsidiary of the national carrier.
The report would also suggest the number of aircraft that would be allocated from A-I's existing fleet for the carrier's low-cost operations.
The operations likely to come under Air India Charters primarily include the short haul flight out of India to the Gulf region.
While some of the operations would be transfered from A-I, the low-cost carrier may also enable the national carrier to augment its operations by using its unutilised bilaterals.
The idea of the low-cost carrier to be operated by A-I is primarily in line with the global trend. Such airlines are often known as no-frill airlines offering only basic services.
A senior A-I executive said, "Most of the global airlines have already started operating their low-cost carriers into India. For instance, Gulf Traveller, the low-cost arm of Gulf Air, is already operating in India, while Air Asia, a Malayasian low-cost carrier, is trying to make its way into India."
"The move is to fight competition. Low-cost operations envisage services with reduced cost across the board with the target areas being employee cost, passenger convenience cost and distribution cost," he added.
Other costs including fuel, navigation, depreciation and interest are not controllable.
The employees of A-I Charters are likely to have lower emoluments and would be working under more productive norms.
The airline's board of directors deliberated on the proposed low-cost operations at its last board meeting.
The committee comprises board members and executives from various departments of A-I.
