Government allows unbundling services from air tickets prices

Following the worldwide successful trend of offering the low cost air tickets to the customers while charging people for the services, if they want to have these, the Government of India has also allowed the airline companies to unbundle certain services from the prices of their tickets. The move is expected to rake in more ancillary revenue for the airlines which will help them in turning profitable. This will also help the cause of people for flying on low air fare on domestic or international flights. So, the passengers will not have to pay for the services which they do not want or desire.

The services which are sought to be unbundled are:

  1. Preferential seats
  2. Meals
  3. Snacks
  4. Drinks (except drinking water)
  5. Checked-in baggage
  6. Use of lounges of airlines
  7. Sports Equipment carriage
  8. Musical equipment carriage
  9. Valuable baggage having higher liability of carrier.

Once these services are implemented, the gap between the low cost carriers and the full service carriers will also close to some extent, though the differentiating elements of both models will remain. This will further allow the airlines to package these services as per their own will and hence create more service based differentiation for passengers. The move is also likely to help new entrants in the field such as AirAsia which operates by providing cheap air tickets to the customers and charging for most of the other services as well as the existing players and make the field more competitive.

 

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