India Dispatch: Indian airlines are now charging extra for services such as choosing seats in advance, as they aim to boost revenues in a challenging environment.
Indian airlines charge for once free services
Mumbai // Indian airlines are charging extra for services such as choosing seats in advance, as they aim to boost revenues in a challenging environment.
Air India and Jet Airways have both reduced their free baggage allowance from 20kg to 15kg for travel within the country after the Indian aviation ministry last month permitted airlines to unbundle certain services and charge separate fees for them, including preferential seating, use of airport lounges and meals.
Jet has started levying a charge for booking seats in advance in economy class on all its international routes operated by Boeing 737 aircraft. It is charging 250 rupees (Dh16) for reserving window and aisle seats, 500 rupees for reserving a seat in the bulkhead row, while booking an aisle or window seat in the front cabin on a flight between Mangalore and Dubai is 1,500 rupees. There is no charge for reserving middle seats, however.
In a move that would be in keeping with the budget airline model, reports in local newspapers last week said Air India was considering charging passengers travelling economy in India for meals.
Saj Ahmad, the chief analyst at StrategicAero Research, said he thought levying extra charges was a risky strategy given the fragility of the Indian aviation market.
"The fees may generate some revenue but airlines stand to lose more if customers take their business elsewhere," he said.
The aviation ministry highlighted that unbundling charges could benefit both passengers and airlines.
"The objective of the decision is to facilitate airlines to offer a low base fare for price-sensitive travellers, while at the same time offer choice to service seekers at a price," according to India's ministry of civil aviation.
"This will allow the passengers to benefit from lower base fares and to customise the product to better suit their requirements and budget while allowing airlines to develop more sustainable operations in an environment of wafer-thin margins."
Airlines in India have struggled with profitability amid high taxes and slowing growth in the country's economy. Last year, India's domestic air travel market contracted by 2.1 per cent, according to the International Air Transport Association.
Thousands of travel agents last week went on strike for one day, protesting a number of issues including airlines being permitted to charge customers additional fees.
Abu Dhabi's Etihad Airways last month agreed to buy a 24 per cent stake in the Mumbai-based Jet as part of a US$600 million deal after the Indian government last September opened up the aviation sector to investment of up to 49 per cent from foreign carriers.
The low-cost carrier AirAsia has teamed up with Tata to set up an airline in India, which is expected to launch later this year.