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Spend more on air travel till airlines’ revenues improve

india Updated: May 17, 2013 02:01 IST
HT Correspondent

Passengers will continue to pay more for flights for the next six months at least, courtesy the government’s new airfare policy. The policy that came into effect a couple of weeks ago allows airlines to charge separately for specific services such as check-in baggage, seat preference and on-board meals.

Although the government projected the move will make air travel value for money, it did not make the reduction in base fare mandatory. Instead, the civil aviation ministry hopes that airlines might reduce base fares if the policy betters their revenues.

“How can we expect airlines to reduce base fares right away? That will be possible only when unbundling of charges boosts their revenues,” civil aviation minister Ajit Singh told HT, adding that the model has worked in matured aviation markets. “If airlines revenues improve, they will automatically cut down base fares to draw more passengers,” added Singh.

Last week, Air India and Jet Airways reduced the free baggage limit from 20kg to 15kg. Both the airlines now charge Rs250 for every extra kilogram. “This means that a passenger who previously used the free limit fully will now spend Rs 1,250 extra per person,” said Sudhakar Reddy, national president, Air Passenger Association of India.

While the ministry hopes that the move will increase the number of fliers, frequent travellers feel that the plan could boomerang. “If a person is suddenly charged for services that were free, they might not wish to travel as frequently,” added Reddy.

Ministry records show that the number of fliers steadily fell from 550.3 lakh fliers in 2011 to 534.14 lakh fliers in 2012, owing to high airfares.