Ministry moves to curb air fare unbundling; carriers not happy

The Indian government is in the process of formulating the dos and don'ts for India's airlines, which have been recently permitted to ''unbundle'' airfares, with extra charges for preferred seats, extra baggage, meals on board, and even lounge facilities.

The aviation ministry has been saying for some time now that it will lay out guidelines to prevent airlines from charging for each and every little service; with civil aviation minister Ajit Singh saying he would not allow passengers to be ''fleeced''.

Expectedly, airlines and passengers have diametrically opposed perspectives on unbundling. While airlines are complaining of government interference in setting charges, passengers think they are being taken for a ride.

The government has already decided to allow airlines to charge extra for only a fixed percentage of the total seats in an aircraft, after airlines like budget carrier IndiGo ought to charge for everything – even middle seats!

"The way airlines are behaving is the principle of an immature market. How can you charge for or separate, say, two children travelling together? We will ask airlines to fix a percentage of seats, 15-20 per cent, to be charged," The Economic Times quoted an unnamed aviation ministry official as saying.

''As more issues surface in the implementation of unbundling of fares, we will make more changes.''

The airlines are not pleased. "This is only half-unbundling and there is no regulatory certainty on the policy. The government should let the commercial forces prevail and let us have the flexibility to charge. A customer would be happy to pay to sit next to a person, so let us charge for the convenience. In any case Rs100 or Rs200 is a small amount for this," SpiceJet chief executive Neil Mills told ET.

IndiGo has reportedly told the Directorate General of Civil Aviation that only about one-fifth of passengers requested a preferential seat and, therefore it shouldn't be a concern to allow airlines to put a charge on all seats.

At present, charges on domestic flights range between Rs200 and Rs500 for a preferred seat.

The government on 29 April allowed airlines to charge separately for services like preferential seating, meals / snacks / drinks (except water), check-in baggage, carrying sports and musical instruments, declaration of valuable baggage and using airline lounges. This list would be reviewed every six months.