Providing airline management with the freedom to take commercial decisions like offering zero baggage fares could generate an incremental $400 million revenue for Indian carriers, aviation consultancy firm CAPA India said in an advisory on Monday.
“One of the reasons that ancillary revenues are not better developed in India is that carriers face unnecessary regulatory hurdles that prevent them from maximising such opportunities. For example, airlines are not permitted to offer fares with zero baggage allowance, or non-refundable fares. And currently they have to comply with fare caps and floors,” CAPA India said in an advisory.
Ancillary revenue is revenue derived from goods or services other than an airline’s primary product offering which is offering seats to passengers.