Tuesday, April 12 2005 18:41 Hrs (IST) - World Time -

Bangalore: Budget airline Air One today (Apr 12, 2005) said it would launch operations on feeder routes in August by offering "same services" to passengers at 30 per cent cheaper rates than full service airlines.

"Only through high load factors can we keep our costs low," Air One Feeder Airline chairman and managing director J W Lobo told reporters in Bangalore.

He said the airline will fly jet planes, offer snacks and have sufficient leg space for passengers.

Air One will begin operations in August with one Embraer ERJ-145 50 seater aircraft, with the second aircraft to fly in September.

"We are taking the aircraft on a five year dry lease at $ 1,35,000 per month for each aircraft," Lobo said.

Air One is promoted by former Indian Airline officials, businessmen in Mangalore and Bangalore, besides investments from several Non Resident Indians.

He said the promoters are bringing in Rs 20 crores, while planning to raise Rs 12 crore from financial institutions for the airline, which plans investment of Rs 32 crores.

"We expect to make a small profit in the first year," Lobo said.

He said the airline plans to outsource non-core activities and focus on the business of flying passengers in non-trunk routes, both long and short haul flights.

Air One plans to increase fleet to five aircraft in the first year and eventually reach a fleet of 25 aircraft in five years.