Mumbai: Indian airlines, like their peers in the US and Europe, will now be able to charge for check-in baggage and seats of choice. Civil Aviation Minister Ajit Singh today allowed domestic airlines to charge fees for preferential seats and use of lounges, among other things, opening for them additional revenue streams.
In its statement, the ministry said it had decided to permit scheduled airlines to unbundle certain services and charge for those separately. The move was based on the recommendations of Nathan Economic Consultants in its report ‘Economic Regulations to Airlines’ Ticket Pricing in India’. The report had batted for unbundling of services “since it has become a necessary aspect of exercising more control over operational costs and running a successful airline”.
The decision, coming within days of AirAsia applying for starting domestic services, could prove beneficial for the Malaysian low-cost airline, which relies heavily on ancillary revenue from luggage, meals, in-flight entertainment, preferred seats, etc, while keeping its base fare low.
30/04/13 Business Standard
