Low-cost carriers are getting stingier. Get ready to pay up more

Updated : November 30, 2018 01:14 PM IST

Since 2013, the DGCA has allowed airlines to unbundle fares, and charge for various other aspects on an “opt-in” basis.

Past couple of weeks, no-frill airlines have pushed the envelope a bit more in terms of what all would they like to charge you for.

Indian passengers never had it so good. No, there was no red carpet being rolled out, but they have long been able to travel for low fares — for example, Rs 3,500 between Mumbai and Delhi. The affordable fares have fuelled a significant increase in the number of first-time flyers in India.

This strategy is essentially a playbook in human psychology at work. Many airlines were keeping ticket prices to attract new flyers. Airlines such as IndiGo, SpiceJet and GoAir earned themselves the clever moniker of ‘low-cost’ carriers (LCCs) because people would see rock bottom fares and then sign up for them. These people typically ignore the samosas for Rs 150 apiece in air. They were only paying for the service of air transport. Nothing extra. This partly helped no-frill carriers grab 68 percent of the domestic marketshare.

In 2013, aviation regulator DGCA allowed airlines to unbundle fares, and charge for various other aspects on an “opt-in” basis. This enabled airlines to start charging for seat assignments and heavier bags, among other things. Such fees, called ancillary revenue, are popular for airlines because the monetisation from customers do not end with ticket sales, but continues until they deboard a plane. Bag fees, meals on board, seat assignments are all a part of this revenue. IdeaWorksCompany, the foremost consultancy on airline ancillary revenue, projects that ancillary revenue in 2018 will be arround $92.9 billion globally (10.7 percent of all global revenue of airlines).

Time To Pay Up

However, in the past couple of weeks, LCCs, or no-frill airlines, in India have pushed the envelope a bit more. DGCA’s Air Transport Circular 2 of 2016 allows preferential seating to be charged separately. However, the circular does not define preferential seating.

IndiGo, India’s biggest airlines, defines seat selection as: “IndiGo offers assigned seating at airport check-in counters. For preferential seating, IndiGo offers advanced seat assignment through its service ‘Seat Plus’ at the time of making a booking or after booking. Certain premium seats may have a fee associated with them. Rows 1-4 and 11-14 serve as "Quiet Zones” on the Airbus A320s, and rows 1-2 in case of ATRs. These seats will be primarily assigned to passengers above 12 years of age.”

Earlier, IndiGo offered the front rows, all extra leg room seats and the Window and Aisle seats at the back of the plane for a charge. You could still get the middle seat for free. Now, it has changed their interpretation of Preferential Seating, and you get charged for any seat assignment before getting to the airport.

An IndiGo statement talked about IndiGo’s decision being driven by customer preferences, but when I polled over 300 people, over 75 percent said a web check-in was their prime choice.

Ajay Awtaney is a business travel & aviation journalist based in Mumbai, and the founder of the Indian frequent-traveller website Live From A Lounge (www.livefromalounge.com).

Disclosure: Vistara is one of the four launch partners of CNBCTV18.com

Low-cost carriers are getting stingier. Get ready to pay up more

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