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Air India Express explores domestic expansion

Air-India-Express

Air India is thinking over expanding operations of its international low-cost arm AI Express in the domestic market

Mumbai: State-run Air India is thinking over expanding operations of its international low-cost arm AI Express in the domestic market, where three budget carriers dominate the space and AirAsia India also expected to compete by year-end with launch of its operations here.

The flag-carrier has recently set up a three-member committee to explore the feasibility of such an expansion plan and also review the routes of the two carriers, to leverage synergies and avoid eating into each other’s market shares, According to the sources.

Air India regained the third slot with 19.2 per cent market share beating budget carrier SpiceJet (17.5 per cent) in July. At the same time, the Delhi-based IndiGo continues to retain its leadership with 29.5 per cent market share in the month.

However, the three low cost carriers-IndiGo, SpiceJet and GoAir combined enjoy 55.5 per cent market share as against 44.5 per cent of the two full service carriers — Jet Airways group and Air India.

Besides, the committee has also been asked to review the routes catered by these two carriers and examine the feasibility of bringing synergy into their operations, sources said.

“AirAsia’s likely entry towards the end of the year could also provide some further growth although the airline will still be relatively small even by the end of the forecast period. These factors could potentially push growth above 6 per cent subject to market conditions from Q3 onwards.

“We expect that by the end of FY14, domestic traffic will match or slightly exceed the previous high water mark of just over 60 million annual domestic passengers reported in¬†FY12,” the CAPA report said.

PTI

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