Why IndiGo and SpiceJet are charging passengers for selecting seats during web check-in, explained

Updated : November 28, 2018 03:02 PM IST

IndiGo’s decision, besides causing consternation among passengers, also created confusion.

Low-cost carriers are known to encourage passengers to check in online so that they can reduce the number of employees at airports.

So why did IndiGo still opt for a move that effectively will make people queue up at airport counters and potentially delay boarding?

The decision of IndiGo, India’s largest airline, to charge passengers who check in online for seat selection, triggered a storm of protests on social media. This pushed the airline to issue a clarification, which was anything but.

IndiGo said some seats may be available for free depending on market dynamics. Here is what it could mean. Say, only 10 seats are free in a flight and all the ten have been taken by passengers who checked in on the web. The next passenger who checked in on the web will have to pay up for selecting a seat.

IndiGo’s decision, besides causing consternation among passengers, also created confusion. IndiGo and SpiceJet, which also charges for seat selection during web check-in, are low-cost, or no-frills, airlines (LCCs). They compete among themselves and full-service airlines such as Air India, Jet Airways and Vistara. LCCs are known to encourage passengers to check in online so that they can reduce the number of employees at airports.

So why did IndiGo still launch an action that effectively will push people to queue up at airport counters and potentially delay boarding? Remember, IndiGo prides itself at punctuality.

The cornerstone of the strategy of LCCs is to offer tickets at low prices (though these days, LCCs are known to charge as much or even more than their full-service rivals). To keep ticket prices low, LCCs do two things.

The No-Frills Strategy

One, reduce costs in every possible way. So an LCC aircraft will not have a business class, the section that boasts plush seats with ample legroom. LCCs are also not known for their elegant lounges or for flashy customer service.

The absence of business class allows LCCs to cram more seats into economy. Passengers have to be content with shrinking legroom in those seats because “hey, the ticket price is low!”

Two, LCCs charge a range of fees. LCCs globally charge passengers for non-essential services like carrying luggage in the hold. Passengers who want to buy meals on board, prefer boarding in a fast lane and wish to travel with a pet have to pay extra. And yes, LCCs also charge fees for selecting seats, especially those with more legroom. These are called ancillaries.

Full-service airlines, as you would know or have guessed, include in ticket prices all charges such as baggage carriage and meals.

Ancillary revenues have proved to be irresistible for airlines globally. This holds true for IndiGo and SpiceJet as well.

Revenue from ancillary products and services for IndiGo has been steadily climbing for both airlines. For IndiGo, this kind of revenues increased by 13.7 percent to Rs 2,578 crore in 2017-18 and by 13.2 percent to Rs 2,267 crore in 2016-17. SpiceJet’s ancillary revenues have risen by 12 percent to Rs 314 crore in 2017-18.

The Ayes And Nays

The practice of airlines collecting its cash in fees (unbundling of services as the aviation ministry calls it) as opposed to through ticket sales has many supporters. You pay for what you want. You’d like a mid-air snack? Pay for it if you haven’t brought food. You don’t mind sitting in a crammed seat. Don’t pay for it.

The critics are those who believe that airlines are making the most of how miserable air travel has become. Waiting in serpentine queues at the airport and passing anxious moments whether you will catch the airline on time is about as pleasant as visiting a dentist. There are several passengers who will be willing to pay extra to avoid this suffering.

The backlash that IndiGo and SpiceJet received on social media was because they were not offering passengers any choice. IndiGo clarified that some seats may be available for free depending on market dynamics. There is not an iota of certainty in that statement, as some passengers have already discovered.

IndiGo also said charging passengers for seat selection “is a common practice followed by airlines across the globe”. So don’t be surprised if LCCs in India borrow more ancillary fee tactics from their global counterparts.

The only reason why these airlines haven’t started charging passengers for carrying bags is because the aviation regulator is against the move.

But brace for such fees. They are inevitable.

Disclaimer: Vistara is one of the four launching partners of CNBCTV18.com.

Have you signed up for Primo, our daily newsletter? It has all the stories and data on the market, business, economy and tech that you need to know.

Why IndiGo and SpiceJet are charging passengers for selecting seats during web check-in, explained

You May Also Like

Countdown begins for ISRO's first mission in 2021, Brazil's Amazonia-1 on board

Biden scores legislative win as House passes $1.9 trillion COVID-19 relief plan

Second phase of COVID vaccination from March 1: All you need to know

Trending on CNBC-TV18

recommended for you