Airlines allowed to charge for special services in India

Airlines allowed to charge for special services in India

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On April 29, 2013, the aviation ministry of India said that it will allow airlines to charge for services like preferential seating, drinks, snacks, meals, use of lounges, baggage, the carriage of sports equipment, musical instruments and the treatment of valuable items. In 2011, the ministry had prohibited airlines from charging for extra services, which prompted low-fare airlines like Indigo and others to include these additional luxuries in its special services category.

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The latest movie by the ministry has been made after the government had cleared a proposal by AirAsia BHD to invest Rs. 80.98 crore in domestic passenger airlines. AirAsia was planning to launch the proposal jointly with Tata sons Ltd. Reports say that airlines like Malaysia’s AirAsia and many other global airlines receive a significant amount of their revenue from charging for such services.

Air Asia will hold about 49% of the stake in the Indian venture, which is expected to launch its service once it gets all the necessary approvals. Tata Sons will own a 30% stake in the new venture, while Arun Bhatia of Telestra Tradeplace Pvt Ltd will hold the rest.

The ministry said in a statement that the decision was based on the recommendations by Nathan Economic Consultants.