Air India Express may charge passengers for on-board meals and do away with free baggage system. The low-cost arm of Air India plans to go the Air Asia way and introduce lower fares and charge passengers for add-ons like meals and baggage.
Air India Express cut back on its flights in summer after the Directorate General of Civil Aviation imposed restrictions on flight duty time for pilots during night. The number of weekly flights has come down from 204 to 170, but the airline hopes to grow its passenger numbers by introducing value fares.
A senior Air India executive confirmed the move and said new fares would be introduced in two-three months.
“We plan to introduce value fares. These could be about 10 per cent lower than the current lowest fares, but passengers would have to pay for meals and luggage. This will make us more competitive. With this, we hope to get extra revenue and increase our loads,'' he said.
Air India Express, with a fleet of 21 Boeing 737s, flies to 13 destinations in the Gulf and Southeast Asia. About 60 per cent of its business comes from Kerala. The airline is locked in competition with other low-cost airlines such as Air Arabia and Bahrain Air and full-service carriers such as Jet Airways, Gulf Air, Qatar Airways and Emirates for a pie of the Gulf-bound traffic.
“We have loads of about 80 per cent and we want to increase it by 10 per cent. We are also expecting 10 per cent revenue growth,” he said. Last year, Air India Express posted gross revenue of Rs 1,750 crore. “Kerala is a price-sensitive market. Besides labour traffic, there is also a large movement of businessmen and professionals who travel to Gulf and return the same night. At the moment, this category of businessmen and professionals just makes about two-three per cent of our passengers ad we want to increase it,” he said.
Earlier this month, Air India Express shifted to a new reservation system but travel agents are not too happy with the change. This is likely to impact bookings, too.
“We are facing problems. The system does not show us the exact balance of the amount we have deposited with the airline,” said Bindu Bijimon, chief executive officer of Muthoot TravelSmart, a Kochi-based travel agency. Agents are required to make advance deposits with the airline to be able to issue tickets.
Air India Express said trials and tests were done before the launch of the new booking system and it would take some time for passengers to get accustomed to it.