Lite fares: Air India may unbundle meals on domestic and short international flights; lounge access for business flyers

New Delhi: Desperate times call for desperate measures. Full service Air India is planning to make meals optional on its domestic and short international (under two hour) flights. Once this “unbundling” rolls out in the next month or two, passengers opting out of meals could have upwards of Rs 250 shaved off their ticket price. While this move, say people in the know, is “on the anvil,” the airline is looking at several other unprecedented measures to fly through the severe cost-revenue turbulence caused by the unending West Asia war.

While not opting for meals could lead to slightly cheaper economy tickets, AI is looking at unbundling lounge access for business class passengers because those opting out of this, could get their tickets cheaper. On an average, lounge operators charge Rs 1,100-1,400 per user at metro airports and Rs 600-700 at non metros. The average spend is about Rs 1,000 per lounge. Many business class flyers are frequent travellers who just make it to airports in time for their flight and do not head to the lounge. If unbundled, this could be a saving in their ticket cost. Banks have been reducing lounge access for credit card users for the same reason to cut their costs.

“From Day One, Air India has had meals bundled in its ticket price. Now the way aviation turbine fuel (ATF) price is rising and the rupee crashing since Feb 28, ticket prices are going up. India is a price-sensitive market and raising fares beyond a point leads to a fall in traffic with many opting to travel by train or road. This has led to the rethinking to unbundle meals on some flights. Other steps are also being considered,” said people in the know.

Several airlines globally have over the past few years unbundled their onboard offerings. Many international full service airlines offer a basic meal in economy while giving the option of buying gourmet meals at an additional cost. Ditto for alcoholic beverages, with cheaper beer and wines being given at no extra cost while the others being charged for. “For passengers, the distinction between full service and low cost airlines is blurring very fast,” said an industry old-timer.

Almost all narrow body aircraft being delivered to AI group will be sent to AI Express fleet for lower cost and more revenue as these single class planes have more seats and don’t offer lounge access and free meals. To increase revenue, the group is looking at having ads behind the boarding cards of Air India Express flights — AI boarding cards have the same already.

The Iran war has impacted airlines globally and AI is no exception. The Tata group airline has lost about Rs 24,000 crore last fiscal; has sought funds from promoters Tata Sons and Singapore Airlines; is the worst impacted Indian carrier by airspace closures to the west that have made its Europe, UK and North America nonstops much longer and is looking for a new CEO.

Ready to Make a Smarter Property Decision? Build Your Legacy with TOI Homes.