State-run air carrier, Air India, facing acute shortage of funds, has announced the roll out of domestic low fare air services under its brand Air India Express, from mid- September. Initially, it would cover 24 cities with 161 flights a week, and later pan India services will be rolled out.

The country's flagship carrier, run by National Aviation Co. of India Ltd, will convert 10 Airbus aircraft to an all-economy class configuration to propel low fare competition in the domestic aviation segment. Union Civil Aviation Minister, Praful Patel had said few days back, "In order to compete effectively with other domestic low fare carriers, and to get a share of the low fare market segment, Air India is considering a proposal to extend low fare services to some of the domestic routes also."

However, Air India, already providing international services, will continue to impart air services, maintaining its full service carrier character.

Full-service carrier including India's largest private airlines, Kingfisher Airlines Ltd and Jet Airways (India) Ltd, have already rolled out all-economy flights, thereby propelling existing competition among discount airlines.

Rishikesha T. Krishnan, professor of corporate strategy and policy, Indian Institute of Management, Bangalore said: "If this is one element of a much more comprehensive revamp, then aggregate of all that may make a difference. But this move in itself may not have a big impact."