Fresh announcements from leading operators IndiGo and Air India have intensified the competition for economy passengers in India’s aviation market.
After Air India introduced a ‘without meal-lower fare’ option for Economy Class a fortnight ago, market leader IndiGo on Wednesday announced ‘IndiGo Lite’ to allow customers travelling with cabin baggage only to book tickets at a lower base price.
IndiGo would roll out their newest option for travel beginning July 15 on all domestic and international non-stop routes.
Industry watchers view this as another chapter in the continued battle to attract more passengers in the country’s large price-conscious traveller segment.
Aviation Expert Vipul Saxena said, “sizeable number of travellers, particularly business executives, and frequent flyers travel without much luggage and return on the same day.” For this segment, the new fare proposition offers a meaningful reduction in travel costs.
“Today’s passengers are increasingly value-conscious and prefer paying only for the services they actually consume,” said another Industry source.
Aviation market consultants also point at better resource optimisation for airlines through such moves. “It supports higher ancillary revenue generation, optimises baggage handling resources, reduces aircraft ground time and contributes to improved operational efficiency,” said Manoj Muttreja, Managing Director of Stellar Aviation.
Muttreja hints that the Indian aviation industry is taking a leaf out of the European market where unbundled pricing is an increasingly growing practice.
“Rather than offering a one-size-fits-all product, airlines are allowing passengers to customise their travel experience by paying only for the services they require. Air India and IndiGo announcements are manifestations of this broader industry trend,” said Muttreja.
Currently, IndiGo dominates the low-cost economy segment with nearly 64% market share, followed by the combined Air India Group at around 27%. India’s domestic aviation market, third largest with over 165 million passengers annually, is dominated by economy and low-cost travel.