In a step towards launching its low cost airline, Air-India Express, in April 2005, Air-India on Tuesday floated a global tender to take on lease six Boeing 737-800 aircraft.

The aircraft, with CFM engines, are to be taken on lease for three years extendable to five years, A-I sources said, adding the last date for submitting technical and financial bids is July 9, 2004.

Air-India: Of divestment and other issues

The no-frills airline would be operated by its subsidiary Air-India Charters Ltd with 25 per cent discounted fares to the Persian Gulf and South East Asia from Cochin, Calicut, Trivandrum and Delhi in the first phase.

The 180-seater leased aircraft, to be based in Delhi, are to be registered under AICL with A-I guaranteeing payment of lease rental and maintenance reserves.

A-I board had, less than a fortnight ago (May 29), approved the starting of the new airline with an all economy class layout through AICL.

As many as 14 Boeing 737-800s would be taken on lease in three phases over a one-year period beginning April to operate 127 flights a week from Kerala, Delhi, Mumbai and Chennai to the Gulf and South East destinations. Most of these flights would be on a quick turn around basis.

Boeing Company vice president (aircraft trading) Dinesh Keskar has already assured A-I that the aircraft would be made available by early 2005.

As part of its growth plans and to increase services to the US, A-I had last month floated tenders to take on lease three Airbus A340-300s and one more Boeing 747-400.

A-I is to launch thrice a week Boeing flights via Frankfurt to Los Angeles from June 11, increase it to five from December and have a daily service from April, 2005.