India’s one of the biggest airlines Indigo is now considering charging its customers for the luggage they check-in for the flights according to the latest developments. This decision from the airline comes in to tackle the intensifying price war in India’s aviation industry. This also shows positive signs of recovery as the travel restrictions have lifted and the passengers are gaining their confidence back to travel.
The Move to Unbundle Baggage Charges
Earlier in February 2020, Indigo didn’t implement the “unbundling of fares” which was just prior to the deadly wave of Covid-19 hitting the Indian territory. Chief Executive Officer Ronojoy Dutta said in an interview that regulations on fares and capacity related to covid prevented airline from taking a decision at that point in time.
Go Airlines India Ltd. has also been looking to unbundle baggage charges from the flight ticket as that would cut the cost considerably and make the airline an ultra-low-cost carrier. Indigo is looking to join the same league. The move from Indigo to cut the cost of the ticket will result in a surge in already fierce competition between the airlines who set the price so low that they barely or sometimes don’t even cover the cost. The price war among the airlines has been devastating to a lot of them as many have gone out of the business of what was the world’s fastest-growing aviation industry before the unprecedented pandemic hit.
Indigo has been constantly making efforts to expand its network as much as possible. Indigo currently controls the majority of the domestic aviation industry and looks to solidify its network by expanding it each passing day. The reason behind these expansions might be related to the growing competition in the industry. The Chief Executive Officer of Indigo, Ronojoy Dutta said in a statement that they will be looking to expand their global network as well. He talked about how the acquisition of Air India by a private player now makes them a formidable competition for Indigo. He anticipated the rise in competition in the domestic market after Air India begins its operations without any financial burden.
On the other hand, Akasa being launched next year is expected to be a low-cost carrier and is expected to up the competition in the domestic territory. Even one of the cofounders of Akasa is Aditya Ghosh who had worked with Indigo for around a decade and is credited for the success of the airline. However, Ronojoy Dutta said that it would take a few years for Akasa before it becomes a tough competition.