Domestic air carriers are aiming for bigger revenue pie by charging for every additional service offered. The initiative may be new to inbound travellers, but it is trending and widely accepted world over.
Airlines like Jet Airways and Air India will now charge Rs 250 per kilo if a passenger's check-in luggage exceeds 15 kilogrammes. No frills carrier IndiGo is even contemplating to charge for pre-selection of seats.
According to rough estimates, non-ticket revenues make up for around 2-3 percent of the total revenues to any carrier. Airlines are keen to push it up to around 10 percent at a time when airlines are unable to maintain yields per passenger. For instance, if a full service airline's quarterly revenues are over Rs 4000, then Rs 120 crore comes from non ticket revenues which can be easily increased by levying charges for every additional service offered.
Bigger airlines have aspirations to boost ancillary revenues from the current USD 3 to USD 10 on international routes in next one year to minimise impact of higher operating cost.
13/05/13 Moneycontrol.com
