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IndiGo considering charging passengers for checked-in luggage: Report

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India's airlines are preparing to position themselves as ultra-low cost carriers by unbundling baggage charges from air tickets.

IndiGo considering charging passengers for checked-in luggage: Report

As India's aviation industry shows signs of recovery after a lull due to the COVID-19 pandemic, IndiGo, the country's largest airline by market share, is considering charging its passengers for checked-in luggage, Bloomberg Quint reported on Wednesday.

The development comes as the airlines prepare to position themselves as ultra-low cost carriers by unbundling baggage charges from air tickets. IndiGo's rival Go Airlines is also planning to unbundle baggage charges from ticket cost, as per the report.

Operated by InterGlobe Aviation, IndiGo hadn't implemented the 'unbundling of fares' when India’s Directorate General of Civil Aviation ruled that airlines could start offering zero baggage and no check-in baggage fares.

The unbundling of fares is a practice that lets airlines break up their total fare into various service components and charge separately for these services.

In an interview with BQ, IndiGo's Chief Executive Officer Ronojoy Dutta said that the airline couldn't take a decision on unbundling earlier due to regulatory caps on fares and capacity related to COVID-19. “We’re waiting for everything to settle down before we lock something,” said Dutta.

Aviation experts believe that the move to unbundle baggage charges from air tickets will bring down the cost of tickets and intensify competition among carriers. However, such a price war may not prove to be beneficial for India's aviation sector as it will force airlines to work with low ticket prices that barely cover their cost -- an unhealthy sign for one of the world’s fastest-growing aviation market.

Besides, there is also the fear of "too many" players crowding India’s low-cost carrier market. At present, IndiGo, Go Airlines, Vistara, SpiceJet are fighting for market domination. Soon, Air India -- which has been acquired by the Tata Group -- would also enter the space with new vigour.

Billionaire investor Rakesh Jhunjhunwala’s new airline Akasa -- expected to start operations soon -- is also slated to be an ultra-low-cost airline.

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