As price war escalates, IndiGo may charge fee for check-in baggage

Low-cost airline IndiGo is looking to introduce a separate charge for checked-in baggage — a move it had not implemented earlier — amid rising competition in the post-pandemic aviation sector.

The proposed move is part of the ‘unbundling’ of fares that airlines are increasingly adopting. While the players have traditionally charged only for ‘extra’ check-in baggage, a global trend now is to offer only cabin baggage for free.

In February 2019, the Directorate General of Civil Aviation (DGCA) had allowed carriers to roll out special fares for zero baggage and no check-in baggage. However, IndiGo did not take action then due to COVID-linked regulatory caps on fares and passenger capacity, a Bloomberg interview quoted the airline’s Chief Executive Officer Ronojoy Dutta as saying.

Intense competition

Another airline that may take the separate-baggage-fare route is Go Airlines India. The company, already a no-frills carrier, is eyeing the ultra-low-cost space now.

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Competition is heating up in the Indian skies not only from the low-cost players but also the new entrants with greater financial muscle. Under the Tata Sons umbrella, Air India is expected to become a relevant competitor again, thanks to the critical airport slots it holds across the world. Following a bankruptcy procedure, Jet Airways is re-entering the scene shortly under new owners.

Akasa, the ultra-low-cost carrier promoted by ace market investor Rakesh Jhunjhunwala, is also hitting the skies next summer. It has already onboarded several top executives and placed a mega order for Boeing aircraft.

Post pandemic surge

Airlines across the world are gearing up to tap the surge in travel as the pandemic subsides. While the Centre has allowed 100% domestic capacity, IndiGo’s bookings are reportedly at 90-95% of pre-COVID levels.

Yet, the repeated recurrence of COVID waves in pockets across the world poses an imminent threat. Also, jet fuel prices are skyrocketing while the rupee is weak. Combined with the competitive need to bring down fares, airlines are in a fix.