Agence France Presse

New Delhi, February 7:

A group of entrepreneurs on Monday announced the launch of a new low-cost private domestic airline, SpiceJet, and said the carrier would take to the skies in May. “We hope to launch our service in May. We shall offer attractive prices without compromising on quality and safety,” said Mark Winders, chief executive officer, SpiceJet.

The no-frills airline plans to offer fares 30-40 per cent below those of full-service carriers. India launched its open skies policy in the 1990s, allowing private players to enter the domestic airline market previously dominated by state-run carriers. SpiceJet is one of nine low-cost Indian carriers which have applied for licenses in the past year and are readying for take-off. Jet Airways, Sahara and Air Deccan are the leading private players in the domestic sector, with Kingfisher Air owned by liquor baron Vijay Malliya planning to join the race from May.

Last month, the government gave approval to domestic private airlines with five years flying experience to begin overseas longhaul flights, keeping only the money-spinning Gulf routes for state-owned Air-India and Indian Airlines. SpiceJet plans extensive use of technology to lower costs and utilise aircraft. It will also keep overhead costs low by selling food and beverages. High fuel costs and other operating fees such as landing and parking charges have kept air fares high.

Aviation analysts say there is a huge untapped market for low-cost carriers in the country of more than one billion people. India’s has just 15 million people who travel by air annually against three million passengers who fly daily in the United States even though the US population is around one-quarter that of India.

The number of passengers is expected to grow to 50 million in five years as a booming economy and new low cost carriers stimulate demand.