Will Air India Express succeed with hand baggage-only fares where others failed? - Hindustan Times
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Will Air India Express succeed with hand baggage-only fares where others failed?

Feb 22, 2024 04:13 PM IST

As Air India Express goes around integrating erstwhile AirAsia India with itself and expanding rapidly on domestic sectors, the need to differentiate is huge.

Air India Express, the fully-owned subsidiary of Air India, has launched a hand baggage-only fares and named it Xpress Lite fares. A look at the booking engine shows that the fare difference between hand baggage-only fares and fares which allow check-in baggage is only 368, while there are some instances where the airline is giving return fare discount which makes the hand baggage-only fares more expensive!

An Air India Express aircraft is seen.(Reuters)
An Air India Express aircraft is seen.(Reuters)

Air India Express is offering 3 additional kilos of hand baggage allowance as part of this fare, making it a total of 10 kgs. The hand baggage only fare helps the airline in more ways than one. First, it reduces the congestion at check-in counters; secondly it helps turnaround the aircraft faster since there is one less bag to be loaded per passenger; thirdly it frees up belly space to uplift more cargo. This though comes with a challenge of fitting the hand baggage in the cabin.

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The practice is often termed environment friendly, since lowering weight means lower consumption of fuel and lower emissions. Air India Express carried over 10 lakh domestic passengers in January, which comprised eight lakh passengers flying erstwhile AirAsia India while 2.62 lakh passengers flew Air India Express. The airline flew 4.65 lakh international passengers.

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A decade-old story on hand baggage only fares

In June 2014, AirAsia India - which currently is AIX connect and is in the final stages of merger with Air India Express, saw the regulator come down heavily on it as it announced charges for check-in baggage, a system which was predominant with its parent AirAsia group. AirAsia India was the Tata group's first investment after FDI was allowed again. The DGCA ensured that the airline offered 15 kg of free check-in allowance.

In 2015, SpiceJet came up with Hand Baggage only fares. The regulator by then had warmed up to the idea of such fares but restricted the penalty amount if the passenger booked hand baggage only fare and turned up with check-in bags. Such a practice was to be allowed on an “opt-in” basis only.

Over the years, SpiceJet, IndiGo and Go Air introduced the “hand baggage only” fares and these were done with a lot of fanfare. Neither the fares nor the fanfare lasted long with airlines quietly burning the options and taking them out of the booking engine, which could be due to lack of passengers opting for this fare or the complexity of handling this on ground.

IndiGo continues to list IndiGo Lite - the name of its hand bag only fare on its website as a random search across sectors does not list any fares which are classified as Lite. Instead the airline has standardised itself to three fares -- Saver, Flexi Plus and Super 6E. SpiceJet - which is now a shadow of what it was in 2015, also does not list the hand baggage only fares.

Why again?

As Air India Express goes around integrating erstwhile AirAsia India with itself and expanding rapidly on domestic sectors, the need to differentiate is huge. The airline is already trying to break the IndiGo monopoly and increase its presence on other routes. The urge to differentiate and try something which others have tried and discontinued indicating that success was limited seems to have taken the better part of decision making for the airline.

Such fare types are common worldwide and the backbone of revenue for low cost carriers in the US and Europe. Apart from these, there are charges for having to print the boarding card, and check-in baggage fares which vary based on kg’s with different fares for bags up to 10kg and bags up to 20kg.

With many first time fliers, so many fares may not be the norm of the times just yet but a new type can be experimented, again! Market acceptability is one challenge, while competition matching is another. In a market as cut-throat as India, competition can match such a move almost immediately. The differentiator hardly remains a differentiator for long.

Blame it on circumstances for now, but the supply chain issues and Air India group's penchant for planes has meant that we have planes configured in all economy class with full service carrier Air India and planes configured with dual class in low cost carrier Air India Express -- where another type of fare has been introduced. Will the road to profitability be via simplification or offerings or both? The answer lies in the years ahead.

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