Air India Express introduces 'cabin-baggage-only' fares: How do they work?

Air India Express has recently introduced 'cabin baggage-only' fares, marking a renewed effort by an Indian carrier to offer lower-priced options by separating the check-in baggage service, reported The Indian Express.

In 2021, the removal of a regulatory restriction that capped the additional charge for standard 15-kg check-in luggage at Rs 200 opened the door for such fare categories. However, airlines hesitated, anticipating a gradual shift in consumer habits, as Indian travelers were perceived as accustomed to luggage allowances.

Air India Express's move could serve as a catalyst, prompting other Indian carriers, especially budget airlines like IndiGo, Akasa Air, and SpiceJet, to adopt similar fare structures.

While the concept of 'Zero baggage' or 'no check-in baggage' fares is well-established in North America, Europe, and Southeast Asia, it hasn't gained traction in India due to various factors, including regulatory limitations.

How will 'Xpress Lite fares' work?

Air India Express has introduced 'Xpress Lite fares' -- essentially 'zero check-in baggage' fares priced lower than regular fares. These fares include a 3-kg complimentary cabin baggage allowance, in addition to the standard 7 kgs, making the total allowance 10 kgs, the publication further reported.

Passengers can separately pre-book check-in baggage at discounted rates or purchase it at the airport, though at a potentially higher cost. Currently, 'Xpress Lite fares' are exclusively available on the airline’s website and mobile app. Ankur Garg, Chief Commercial Officer at Air India Express, envisions the launch as a new flying approach in India, aligning with global trends.

How will it benefit the airline?

Unbundling fares involves breaking down the product or service into separate components, each sold at varying prices. This strategy aims to appeal to price-sensitive consumers by offering diverse combinations of individual features instead of a single, comprehensive package.

Airlines benefit by maximising profits and attracting passengers willing to forgo certain services for cheaper fares. This approach is especially suitable for corporate travelers on short trips.

Lower luggage loads contribute to fuel cost savings, and cargo hold space can generate additional revenue by transporting goods. While unbundling is common among low-cost airlines globally, some have shifted to bundled fares, including extras like baggage and meals, to attract less price-sensitive passengers seeking added comfort.