IndiGo may start charging passengers for checked-in luggage, a plan it is considering ahead of a potentially fierce price war in India’s cutthroat air travel market.
Dubbed an “unbundling of fares”, it had failed to implement it in February despite the Directorate General of Civil Aviation approving the move to offer zero baggage and no check-in baggage fares.
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What Is ‘Unbundling’?
Unbundling here refers to certain services such as preferential seats, meals, use of airport lounges, check-in baggage, transport of sports and musical equipment be made separate and chargeable.
Ronojoy Dutta, CEO of InterGlobe Aviation Limited which operates IndiGo Airlines, said that a decision couldn’t be taken at the time due to regulatory caps on fares and capacity related to Covid.
Price War Imminent?
Go Airlines India Ltd. is also mulling over unbundling baggage charges from air tickets to position itself as an ultra-low-cost carrier.
IndiGo’s move to bring down ticket fares even further could trigger intense competition among carriers who drive fares so low that they often can’t cover costs.
Such price wars have resulted in driving many airlines out of business in the Indian aviation market which was one of the world’s fastest-growing before the pandemic.
Market Overcrowding
Another concern is of India’s low-cost carrier market becoming overcrowded with too many players.
The present roster includes IndiGo, Go Airlines, Vistara, SpiceJet all fighting for market domination.
Akasa Air To Land Soon
New players are also expected to enter such as the recently acquired Air India and billionaire investor Rakesh Jhunjhunwala’s new airline Akasa Air.
Coincidentally, the latter was co-founded with Aditya Ghosh, former President of IndiGo who has a 10% stake.
It is expected to commence operations in Summer 2022 and will also position itself as an ultra-low-cost airline.
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