Tuesday, November 15, 2016

New norms hit airlines' ancillary revenue

The government’s passenger-centric initiatives such as limiting cancellation charges and reducing passenger baggage fees have hit airlines’ revenue from ancillary sources.

IndiGo, which announced its September quarter results last week, saw its ancillary revenue record a sequential decline of 3.8 per cent, compared with the double-digit growth in previous quarters. For the September quarter, revenue from ancillary sources stood at Rs 558.4 crore compared to Rs 581 crore in the April-June period. The same had grown 9.2 per cent and 3.1 per cent, sequentially, in the previous two quarters.

“The ancillary revenue figures were impacted due to the Director General of Civil Aviation (DGCA)’s new rules, limiting charges on excess baggage and booking of tickets closer to the date of departure due to low-ticket prices,” the management said during a conference call with analysts. The decline is likely to be similar for other airlines as well.
15/11/16 Arindam Majumder/Business Standard

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