IndiGo Amends Ancillary Charges: ₹2000 Seat Price Introduced
In a recent update, IndiGo, the leading carrier in India, has implemented changes to its ancillary charges, including the introduction of a ₹2000 fee for certain seat categories. Effective January 4, 2024, the airline has discontinued its fuel charge but revised its seat-selection charges, with immediate effects seen on its booking engine late last week and updated on the official website.
IndiGo designates specific seats as “XL,” offering extra legroom or early deplaning, with rates ranging from ₹1400 to ₹2000 for 18 seats out of 180 or 186 on the A320/A320neo aircraft. The overall seat prices, which previously ranged from ₹150 to ₹1500, have now been adjusted to range between ₹150 and ₹2000, indicating a 33% increase at the upper end.
Click to check IndiGO’s fees and charges
Interestingly, some seats in the middle towards the rear of the aircraft remain free for booking, maintaining a cost-free option for passengers. The changes are not uniform, with certain prices dropping, and there are no alterations in seat selection for flights operated by the ATR 72-600.
For rows 2 and 3 on the Airbus fleet, the seat selection charges have decreased from ₹450 to ₹400. However, on the majority A320 fleet, charges for row 11 and rows 14 to 20 have increased from ₹250 to ₹400, even for middle seats previously available for ₹150.
IndiGo reported an ancillary revenue of ₹1551 crores in the last quarter, encompassing seat selection, meal choices, and other combinations available for sale.
Potential Impact and Market Dynamics: IndiGo, with a 60% market share in India, holds sway over many routes, creating a situation where passengers have limited alternatives. The increased ancillary charges prompt questions about potential reactions from competitors. While the Air India group, led by Air India Express, is becoming more competitive, the industry awaits whether rivals will follow suit in raising seat selection prices or capitalize on this difference as a marketing strategy.
With a strong network and corporate deals favoring IndiGo, competitors like Air India Express, SpiceJet, or Akasa Air face challenges in matching pricing power. Akasa Air, for instance, offers seat selection charges ranging from ₹150 to ₹1500, while Air India Express follows a similar structure, with the MAX aircraft operating in dual class similar to Akasa Air but marketed as mono-class.
The issue of families being separated during seat assignments remains a concern, particularly as web check-in is no longer mandatory. While the government has refrained from intervening, the call for ensuring families with children are seated together is likely to grow louder.
As IndiGo adapts its ancillary charges strategy, the aviation industry is keenly observing its impact on passenger preferences, competitive dynamics, and the overall market landscape.