Govt plans to float new budget airline

Mumbai: A new low-cost airline is likely to hit the skies next year. This time it isn’t another smart private entrepreneur, but the government of India which will be the new owner.
Once the merger between Air India (AI) and Indian (formerly Indian Airlines) is completed before the end of this financial year, the merged entity may launch a domestic version of Air India Express, the low-cost airline floated by AI last year. The boards of both the airlines, which met in Mumbai on Thursday to discuss the merger, have given the go-ahead to a consultant to look at the feasibility of the venture. The same consultant is also expected to prepare a roadmap for the merger.
The new low-cost venture is expected to use the excess capacity that the merger is likely to create.
But the trick will be to ensure there is no cannabilisation between Indian and the new airline.
At the same time, Air India Express will also expand its international network.
07/05/06 Manju V/Economic Times

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