Some more details from Business Standard:
Second no-frills airline by April
Our Bureau in Bangalore
Published : December 24, 2003
AirDeccan, the country’s first no-frills airline, will soon have its first competitor in Airone Feeder Airline Pvt Ltd.
Headed by retired Indian Airlines staff and a businessman in Bangalore, the new airline plans to begin commercial operations by April 2004. The plan has been cleared by the ministry of civil aviation.
“We are in the process of mapping routes. Ernst & Young has shown interest to raise funds for the venture. We have set a deadline of April 2004 to begin operations,” J W Lobo, a promoter of the company, said.
The promoters of Airone will hold over 51 per cent in the airline, while investors will hold the rest. The carrier will raise working capital funds from banks and interested parties.
Airone will dry lease two 50-seater jets from Brazilian aircraft maker Embraer. “Initially, we will need Rs 4 crore for the dry lease of two aircraft. Our major operational cost will be in leasing craft and fuel. We are arranging the working capital for meeting fuel costs. Besides this, we will require some money for the initial operations,” Lobo added.
While AirDeccan has opted for a similar dry lease route, Airone’s advantage will lie in the fact that it would dry lease brand new aircraft, thereby reducing maintenance costs.
Currently, AirDeccan operates with older turbo prop aircraft requiring higher maintenance costs.
“We may incur 10 per cent extra expenditure when it comes to the time taken to cover a certain distance as we will operate a jet plane. Whereas, the hourly consumption of fuel is the same as that of a turbo prop plane,” Lobo explained.
Though the route planing is at the conceptual stage, Airone has decided to operate between the southern and western region.
The carrier has already signed a memorandum of understanding with Narayana Hrudayalaya, a renowned heart hospital in Bangalore, for ferrying patients from the north-east.
Airone is also exploring ways to increase its margins by not going in for traditional ticketing methods.
Though e-ticketing is the obvious alternative, the company is looking at other viable ways also to sell tickets.