Confirming the plan, Vasudevan Thulasidas, chairman and managing director, A-I said, "The board of directors has taken an in-principle decision that Air-India and its low-cost carrier Air-India Express would start domestic services. The operations would start once we have enough new Boeing aircraft." The delivery of 68 aircraft from Boeing will start in November.

While Thulasidas was reluctant to specify the timeframe for the launch, industry sources said the delivery of aircraft would be completed by mid-next year and, hence, its domestic service would start by that time.

A-I's domestic operations would mean a direct competition to the Jet Airways-Air Sahara combine, national carrier Indian Airlines and Kingfisher Airlines.

"Currently, we are using our own aircraft to link cities like Ahmedabad and Bangalore while other places are connected by IA. With more aircraft joining the fleet, we can afford dedicated domestic services, which will also provide connectivity to our international flights," an A-I source said.

He pointed out that the national carrier would give prime importance to starting non-stop flights to global destinations once the delivery of Boeing aircraft is through.

A-I's order from Boeing comprises twenty-three 777s, including eight 777-200LR Worldliners and fifteen 777-300ERs and twenty-seven 787-8 Dreamliners. Air-India Express, a wholly-owned subsidiary of A-I, will receive 18 next generation 737-800s.

A-I currently operates a fleet of eleven 747-400s, two 747-400 Combis, two 747-200s, two 747-300 Combis, two 777-200ERs and 21 Airbus 310-300s. The airline will use this order to support both fleet renewal and expansion plans.

The 777s will replace its current fleet of 747-200s airplanes, while the 787-8 Dreamliner will replace its aging A310 fleet. "Air-India will gradually phase out the Airbus fleet with brand new Boeing," the source said.