In line with global LCC practice, Air India Express launches cabin bag-only fares

In line with global LCC practice, Air India Express launches cabin bag-only fares

Tata group airline Air India Express on Tuesday announced the introduction of cabin baggage-only fare category “Xpress Lite”, marking a fresh attempt after years by an Indian carrier to unbundle the check-in baggage service for lower fare categories, a prevalent practice among low-cost carriers (LCCs) in various aviation markets including Europe and Southeast Asia.

“Xpress Lite fares enable guests who prefer travelling without check-in baggage to make the most of fares which are lower than regular fares. Xpress Check-In enables flyers to avoid queues at counters and baggage belts and comes with a complimentary +3 kg cabin baggage allowance in addition to significantly discounted pre-booked prices for +15 kg and +20 kg check-in baggage allowances to ensure the maximum flexibility and convenience for guests booking on Xpress Lite fares,” Air India Express said in a statement, adding that this fare category will only be available on the airline’s website and mobile application.

Unlike a number of other aviation markets, the Indian aviation space had so far been an outlier when it came to hand baggage-only airfares as domestic airlines continued to offer free check-in baggage allowance to passengers. A number of foreign carriers operating flights to and from India did offer stripped-down airfares without any check-in allowance, but none of the Indian carriers were doing so.

In 2016, the Directorate General of Civil Aviation (DGCA) had allowed cabin bag-only fares, but the regulator capped the additional charge for check-in luggage at just Rs 200. According to industry insiders, the low cap did not allow airlines to commercially exploit the unbundling of check-in service, and though some did try it out, such fares never took off. Then in 2021, the DGCA finally allowed unbundling of services without a cap on charges for luggage check-in. However, no Indian carrier subsequently announced cabin bag-only fares, until now.

According to industry sources, Air India Express’s decision could nudge other Indian airlines, particularly no-frills carriers like IndiGo, Akasa Air, and SpiceJet, to follow suit. This, they say, could change airfare structures in India in a big way going forward.

“The launch of Xpress Lite fares heralds what we hope will be a new way to fly in India, extending a proposition already popular amongst flyers across the world, including international airlines flying to and from India…Xpress Lite Fares across our domestic and international network have the potential to redefine convenience in air travel while delivering exceptional value,” said Ankur Garg, Chief Commercial Officer at Air India Express.

Unbundling is an established strategy among airlines—primarily LCCs—globally and allows them to maximise profits by delinking services like baggage and in-flight food and beverage services from the airfares. While on the one hand, such a pricing strategy allows carriers to rationalise costs and offer multiple fare offerings, on the other, it helps them offer lower fares to price-sensitive flyers willing to forego such services in favour of cheap airfares. Apart from price-sensitive travellers, such fares also suit corporate flyers taking short work trips.

Lower luggage load also helps airlines save on fuel, and also allows them to use vacant space in the cargo hold to generate ancillary revenue by hauling goods.

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