STOCK MARKET BSE NSE

Air Passengers Will Have to Shell Out More for Additional Facilities

DGCA gave a free hand to the carriers to charge on these counts in a move to push up their ancillary revenue.

Published: 13th April 2015 08:51 PM  |   Last Updated: 13th April 2015 08:53 PM   |  A+A-

igi_delhi_airport_t3
By PTI

NEW DELHI: Air passengers will have to shell out more for availing facilities such as preferred seats and use of lounges with aviation regulator DGCA giving a free hand to the carriers to charge on these counts in a move to push up their ancillary revenue.

The Directorate General of Civil Aviation had in April 2013 unbundled these services, allowing the airlines to charge for such facilities but a month later restricted the number of preferred seats for pre-booking at 25 per cent of the overall capacity on domestic flights.

The services unbundled include preferential seating, meal/snacks/ drink charges (except drinking water),charges for using lounges, check-in baggage charges, sports equipment charges among others, the DGCA said.

The practice of charging for such facilities was launched in 2008 by some US carriers which were facing financial crunch.

Carriers like Air India, GoAir and IndiGo, who had started charging from their customers for such facilities following DGCA's unbundling orders, stopped the practice from May 2013.

Unbundling of services and charges thereto has the potential to make basic fare more affordable and provides consumer an option of paying for the services which one wishes to avail, the DGCA said in a recent circular on air transport.

On the basis of various feedback received, it is felt  that many a times these services provided by the airlines may not be required by the passengers while travelling, it said.

Ancillary revenue is the one which airlines generate any means other than the ticket price.

Noting that ancillary revenues are expected to be a key focus for low-cost carriers in FY 2015, aviation think-tank CAPA in a report late last year had said, "To date Indian carriers have tread softly with respect to unbundling, partly because of regulatory restrictions and partly due to a reluctance to make the first move."

But strong ancillary revenues will be necessary to support a low base fare pricing strategy, it had said, adding "CAPA anticipates that regulations will be eased significantly over the next few months... By the end of FY 2015, LCCs are likely to be generating ancillary revenue right across the value chain."



Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp