SpiceJet, AirAsia await govt nod on discounts for light travellers

Some airline sources, however, fear it will reduce overall yields

Low-cost carrier SpiceJet is ready to offer discounts to passengers who travel without check-in baggage as soon as the Directorate General of Civil Aviation (DGCA) clears a proposal.

SpiceJet chief operating officer Sanjiv Kapoor said the move will encourage passengers to travel light and help reduce fuel burn.

The proposal of the DGCA has also found a taker in AirAsia, which had in fact asked for permission to do so when it had started operations. Mittu Chandilya, chief executive officer (CEO) of AirAsia India, said, "We are excited about this and have always advocated the unbundling of fares and being transparent with all charges against each service and product. We have been sharing how this actually works to give passengers more choices and flexibility and so are happy to see this proposal"

The civil aviation regulator is considering allowing airlines to offer discounts to passengers without check-in baggages as this would benefit both parties.

"SpiceJet would be keen to implement as soon as possible once this is permitted as this is commonly practiced by low-cost airlines all over the world and encourages customers to travel light in an an era of extremely high fuel costs,'' said SpiceJet's Kapoor. He said that the idea was to charge passengers for services which are availed by them.  British Airways offers hand baggage-only fare on its short-haul routes and this seems to be popular, Kapoor added.

Sources from other private airlines, however, feel that such discounts may actually further reduce fares for corporate customers who typically travel without baggage and not benefit leisure travellers. According to industry estimates, as much as 40 per cent to 45 per cent of passengers travel with no check-in baggage and this could be a large financial burden on airlines. Until, of course, they neutralise the impact by charging more from passengers with check-in baggage or reduce the 15-kg baggage allowance.

Airlines have been clamouring for the unbundling of fares so that these can increase their yields. The government has given some leeway like allowing these to charge extra on priority seating and seat of choice, among others. Ancillary revenues currently constitute only two per cent to five per cent of overall revenues.

Lightening up

• The civil aviation regulator is considering allowing airlines to offer discounts to passengers without check-in baggage as this would be a win-win to both parties
• Sources from other private airlines, however, feel that such discounts may actually further reduce rates for corporate customers who typically travel without baggage and not benefit leisure travellers