Is Air Sahara converting into a low-cost carrier

Mumbai, Aug 29 | Updated: Aug 30 2006, 05:30am hrs
Air Sahara is converting four of its Boeing aircraft into all economy class configuration, in what could be the first signs of the airline considering a change in its profile from a full service carrier to a low-cost carrier. Air Saharas current fleet consists of 20 Boeing aircraft and it is likely that most of them will be converted into all economy class, according to sources.

Air Sahara may phase out business class from several sectors, barring Mumbai-Delhi, and a few other metro routes.

Sources also said that the load factor of Air Saharas business class is dismally low and it could capitalise on the growing market by converting into an all economy class carrier.

Analysts feel that it would be very difficult for Air Sahara to convert from a full-service to a low-cost operating model because low-cost carriers work on completely different aircraft configuration and cost structures. Most low-cost carriers, for instance, fly with single aircraft types across their entire fleet. Their operations are also tuned to minimal operational expenses, unlike full service carriers like Air Sahara.

Jet Airways' aborted deal to acquire Air Sahara has left the latter vulnerable, with its market share dipping in a highly competitive market. It also faces the difficult prospect of rebuilding the airline since several of its aircraft are currently grounded. Air Sahara's market share has dipped from 13% when Jet Airways announced its takeover plans to 8% as of now.

While Air Sahara is fighting a legal battle with Jet over the failed acquisition deal, the airline is keen on expanding routes and fleet size. The airline has recently announced operations to 14 new destinations and has placed orders with Boeing company for purchase of ten Boeing 737-800 passenger jets worth $700 million. The airline has also envisaged having the largest network and a market share of 12-13 % by 2007.