India is all set to have another low cost carrier after Air Deccan with the civil aviation ministry giving a no objection certificate to Royal Airways, formerly known as ModiLuft, to start operations. The airline is expected to start operations in early 2005.

The Vijay Mallya-owned Kingfisher Air is also expected to start its operations soon following a low fare structure. The government has also given a NOC to Kingfisher Air. "We will start operations in end-March early April next year," a senior Royal Aviation executive said.

Royal Airways will follow a dynamic pricing model for its flights. As per the model, airfare on a particular flight are determined on the basis of the demand and availability of seats.

The airline will start its service with five Boeing 747-400 aircraft in the first phase. It plans to start services in the busy and lucrative Delhi-Mumbai sector, Delhi-Bangalore, Delhi-Chennai and Delhi-Kolkotta sectors. Besides, it will also operate services in the non metro sectors as well.

Royal Airways seems to follow a different business model than Air Deccan, India's first low-cost no-frill carrier, which first started operations in the non metro routes and gradually expanded operations in the metro sectors. 

Aviation experts are of the view that, with more low cost carriers starting operations in key sectors, airfares are expected to fall from the present levels.

Following the entry of Air Deccan, the airfare in sectors like Delhi - Mumbai has come down to as low as Rs 700. Royal Airways also appointed Mark Winders as the chief executive officer of the company. Winders is a veteran of 32 years in the aviation industry including start up of a low cost airline in North America.