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The air hybrid engine absorbs the vehicle kinetic energy during braking, stores it in an air tank in the form of compressed air, and reuses it to propel a vehicle during cruising and acceleration. Capturing, storing and reusing this braking energy to give additional power can therefore improve fuel economy, particularly in cities and urban areas where the traffic conditions involve many stops and starts. In order to reuse the residual kinetic energy, the vehicle operation consists of 3 basic modes, i.e. Compression Mode (CM), Expander Mode (EM) and normal firing mode. Unlike previous works, a low cost air hybrid engine has been proposed and studied. The hybrid engine operation can be realised by means of production technologies, such as VVT and valve deactivation. In this work, systematic investigation has been carried out on the performance of the hybrid engine concept through detailed gas dynamic modelling using Ricardo WAVE software.