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Air trips get more expensive for travel-heavy passengers

Source : BUSINESS_STANDARD
Last Updated: Wed, May 08, 2013 20:51 hrs

Now, extra baggage and preferred seat are going to cost you more as you plan an air travel. Within days of the civil aviation ministry allowing airlines to unbundle services, IndiGo today decided to charge an additional Rs 200 for each aisle and window seat. Only the middle seat would not attract any additional charge. And, if you want a seat in the front row or next to the emergency exit - both with more leg space - you will have to fork out an additional Rs 500.

These new charges would, however, apply only on pre-booking of preferred seats on the internet or through agents. Online travel firm Yatra.com has confirmed IndiGo's new rates. You could still reach the airport check-in and ask - if you are lucky and such seats are available, the airline would offer you those without any extra cost.



IndiGo's decision, the first by an airline to charge more for preferred seats, has come a day after Air India reduced the free-package limit for each economy-class passenger from 20 kg to 15 kg. From next week, a flyer would have to pay Rs 200-250 more for every one kg of extra luggage.

Jet Airways, too, is following suit. It has brought the free-luggage limit down to the same level as Air India. From May 15, the Naresh Goyal-promoted airline would charge Rs 250 more for every one kg of additional luggage. This essentially means a passenger who so far carried 20 kg of luggage without any extra cost will have to pay an additional Rs 1,250 for the same weight. Business-class passengers have, however, been spared from this. They would continue to be allowed to carry up to 30 kg of luggage on domestic routes without having to shell out any extra amount.

SpiceJet, another key low-cost carrier, too, is weighing options to boost its ancillary revenues through excess baggage claims and pre-booking of seats. A decision on this is likely to be taken by the end of May.

According to analysts, the additional income for IndiGo, assuming all its seats are pre-booked, would be equivalent to revenues from five additional passengers.

While announcing the unbundling of services, Civil Aviation Minister Ajit Singh had said the move would surprisingly lower basic fares. However, that doesn't seem to be happening anytime soon. SpiceJet CEO Neil Mills says: "In an ideal environment, base fare should come down. But that would take time."

According to the Centre for Asia Pacific Aviation, the Indian airlines are set to earn ancillary revenues of $500 million a year after unbundling of services.

Sunny Sodhi, Yatra's COO (corporate travel) & senior vice-president (air product), says: "Sooner or later, all airlines would join the bandwagon and reduce free-baggage limits. Indians like to travel heavy. Globally, airlines like AirAsia charge even for carrying more than a specified number of bags. This, along with charges for preferential seats, will bring in additional revenue streams for airlines." According to industry estimates, ancillary revenues account for 10-12 per cent of airlines' top lines.

"With extra charges on every one kg of additional luggage, we might see a cultural shift in India. Many a time, passengers pack in nearly seven days of luggage for a two-day trip. They might now begin to travel light. This would reduce fuel-burn, speed up baggage handling and lead to faster turnaround of aircraft," said Amber Dubey, partner and head, aviation, KPMG.

The Ministry of Civil Aviation had allowed Indian airlines to unbundle certain services and charge for them separately. The airlines would have to submit the details of various charges for unbundled services. The DGCA would monitor such that the fees are not altered unlike airfares for flights.

The decision is expected to open up additional revenue streams for airlines - from check-in baggage, use of lounges by economy class passengers for a fee, carriage of sports or musical equipments - who have been struggling to maintain operations sustainably in an environment of wafer-thin margins.

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