The Minister for Civil Aviation Ajit Singh, has decided to permit scheduled airlines to unbundle certain services and to charge fees for these services separately. This is based on the recommendations of the Nathan Economic Consultants in their report on “Economic Regulations to Airlines Ticket Pricing in India”.
Nathan Economic Consultants in their report have recommended unbundling of services “since it has become a necessary aspect of exercising more control over operational costs and running a successful airline”. Globally, scheduled airlines are permitted to unbundle services and levy a charge for each of the unbundled services. These are called “Unbundled Flight Products” or a la carte pricing.
The objective of the decision is to facilitate airlines to offer low base fare for price sensitive travellers, while at the same time offer choice to service seekers at a price. This will allow the passengers to benefit from lower base fares and to customise the product to better suit their requirements and budget while allowing airlines to develop more sustainable operations in an environment of wafer thin margins.
DGCA is empowered to monitor the levy of charges for such services/flight products under Rule 135 of the Aircraft Rules, 1937 and such services come under tariff as per the definition provided under Section-5 of the Aircraft Act. However, the levy of such charges will be based on the following principles:-
1. Safety, schedule and reliability not to be compromised.
2. Services permitted for unbundling shall be distinct with a clear description and without any ambiguity.
3. Services to be provided on opt-in basis and not on opt-out basis i.e. customers should be given opportunity to pick and choose which amenities they want to receive and pay for.
4. Charges for unbundled services shall be a fixed amount and announced well in advance by the airlines which shall not vary with the base fare for a particular flight.
5. The key guiding principle shall be adequate disclosure and transparency on the part of airlines on the websites, online travel portals and travel agents so that the consumers maximize the informed choice.
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