India's government has again acted on its liberalisation pledges and given privately owned Air Sahara and Jet Airways much sought-after rights to serve the UK.

Approval came in January, with the Ministry of Civil Aviation announcing that Air Sahara had been granted rights to operate to London Gatwick and Jet Airways approval for services to London Heathrow. The carriers are now seeking new aircraft to serve the UK market, and, if launched as planned later this year, the flights will represent their first international services outside south Asia.

Air Sahara and Jet were exclusively domestic carriers until early last year, when they started flying to Sri Lanka following a change in policy that allowed for south Asia services by privately owned airlines. Late last year the policy was further eased, with an announcement that privately owned scheduled carriers meeting certain criteria can operate to all countries apart from those in the Middle East.

The changes came after years of protectionism for state-owned Air India and Indian Airlines, which have been slow in expanding their fleets to keep up with demand, while foreign airlines have been significantly boosting services to India.

Domestically, air travel is also growing rapidly as changes in the operating environment allow for new private carriers to start flying, most adopting the low-cost model. Bangalore-based Air Deccan was the first of the new players to enter the market in August 2003 and it has since expanded rapidly.

Several new carriers plan to launch this year, the most advanced being Kingfisher, which aims to operate Airbus A320s on domestic trunk routes from May. It plans to keep costs low, but offer on-board frills including in-flight entertainment.

Another start-up that is being taken seriously is SpiceJet, which is being established from the shell of former domestic airline ModiLuft. It aims to adopt the no-frills model and hopes to launch services around the middle of the year with Boeing 737-800s.

SpiceJet is to be the brand name used by registered company Royal Airways. Royal was originally known as ModiLuft, which operated domestic services between 1993 and 1996. It was established by Indian company Modi Group in partnership with Lufthansa, but was grounded after a dispute arose with the German carrier over aircraft leases.

Source: Airline Business