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Airlines allowed to price services

Airlines allowed to price services
Highlights

Like preferred seats, check-in baggage, meals etc. In a move that would raise the cost of air travel, the government said on Monday that it has...

Like preferred seats, check-in baggage, meals etc. In a move that would raise the cost of air travel, the government said on Monday that it has allowed airlines to charge passengers for preferred seats on a flight, check-in baggage and meals, among other things. "Civil Aviation Minister Ajit Singh has decided to permit scheduled airlines to unbundle certain services and to charge fees for these services separately," an official release said.
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The services for which the airlines would be free to charge passengers include preferential seating, meals, snacks, drinks (barring drinking water), check-in baggage, use of airline lounges, carriage of sports equipment and musical instruments and valuable baggage which have higher carrier liability. The practice was launched in 2008 by some US carriers which were facing financial crunch. Their decision to charge for even the first checked baggage had then received flak from air travellers, but the practice still continues with the airlines generating revenue worth millions of dollars. The release said the Minister's decision was based on recommendations of an independent consultant, which said, "Unbundling of services ... has become a necessary aspect of exercising more control over operational costs and running a successful airline." "The objective of the decision is to facilitate airlines to offer low base fare for price sensitive travellers, while at the same time offer choice to service seekers at a price," it added. According to the release, the decision would "allow the passengers to benefit from lower base fares and to customise the product to better suit their requirements and budget while allowing airlines to develop more sustainable operations in an environment of wafer-thin margins". The airlines which decide to levy charges on these services would have to file details of services to be unbundled and the fees to be charged for them to aviation regulator Directorate General of Civil Aviation (DGCA). "DGCA may not fix fee for unbundled services but shall have the right to intervene and stop charging if regulatory principles are violated by the airlines," the release said. It said the airlines would have to maintain transparency and inform the travelling public and agents what fee was being charged for which of the 'unbundled services'. The charges would be a fixed amount and announced well in advance by the airlines "which shall not vary with the base fare for a particular flight". The customers should be given the opportunity by the airlines to pick and choose which amenities they want to receive and pay for, the release said.
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