Air India to focus on innovative regional routes to shore up growth

May 23rd, 2011 - 5:46 pm ICT by IANS  

New Delhi, May 23 (IANS) National carrier Air India Monday said that it will focus on innovative regional routes, including tier-two and tier-three cities, to shore up its domestic market share and revenues.

“We will focusing on these attractive routes in the coming days to gain back our market share by providing the cheapest possible fares on them,” a senior official with the flag carriers operational side told IANS.

According to the official, the company expects the regional sector to be the growth driver for the Indian aviation industry as more and more of the tier-two and three cities require connectivity to major metros.

“The increasing demand, coupled with non-existance of any competition, gave us this opportunity,” the official said on the eve of the company’s new Delhi-Kanpur-Kolkata flight, on which it expects an 85 percent seat occupancy rate.

“This sector is such that there will be a scarcity of seats rather than scarcity of demand.”

The flight from Kanpur will be inaugurated by Civil Aviation Minister Vaylar Ravi on Tuesday. It will be operated by a CRJ (Canadian Regional Jet) which can carry 70 passengers.

On the revenue side the cash-strapped airline expects to gain lost ground by offering lower fares, especially on major metro routes which have stopovers at cities like Kanpur.

“The average fare for a Delhi-Kokata direct flight is Rs.6,000 and goes up as the seats are booked. We are offering Rs.4,000 on the Delhi-Kanpur-Kolkata route and there is very little chance of fare escalation,” the official said.

The company expects that operating small planes like the CRJ and the ATR turbo-prop will lower its operating costs.

“While landing charges are pretty low due to government subsidies for operating these aircraft, even our operations cost will go down,” the official said.

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