Unbundling returns: Where will low-fare airlines stop? By Anjuli Bhargava "The low-fare revolution is now com ing to bite the airline market. Let me elaborate. A report titled The Sky's the Limit, by a United States (US) Senate sub-committee on the airline indus try's practice of "unbundling" as many charges as possible in a way that these ancillary fees have become a critical revenue stream-criticises carriers for levying new charges besides ticket price. Be it seat preference, food, water, or check-in baggage, extra charges are being levied for vir tually anything. This strategy, known as unbundling, bas spread to almost every airline. The so-called ancillary fees have become a vital revenue stream. According to the report, unbundling has "Insidiously raised the cost of flying" for consumers, forcing them to pay to be seated next to their minor children or have carry-on luggage. The report argues that US-based airlines like United, Delta, Spirit, Frontier and American Airlines have generated billions of dollars in revenue from ancillary fees. while travellers confront increasingly com plex fees, with fewer options for avoiding them, obscuring the total cost of travel. The report says that the five airlines collectively earned $12.4 billion in revenue from seat charges between 2018 and 2023 and that, in 2023, United earned $1.3 billion, more than the $1.2 billion it earned from carry-on baggage fees." .."The question that arises is where the line is to be drawn on such practices. Although not yet a practice in India, many low-fare airlines around the world charge for checked-in baggage and every extra kilo is chargeable. If the airlines charge for every extra kilo carried on board, why shouldn't a passenger's body weight be taken into account? I can argue that the passenger sit- ting on the seat next to me weighs at least 25 kilograms more than me and should pay accordingly. Let me end by reminding readers of the storm Ryanair chief executive officer Michael O'Leary kicked up some years ago, in his characteristically flamboyant style. Leary had said that he was considering charging passengers for the use of lavatories on his planes (pay-for-pee, as it was crassly termed) and and elaborated in some detail on why he thinks it would be justified. Faced with loud protests, this did not come to pass then, but industry observers argue that the way things are going. Leary might have been prescient. With airlines in India and glo- bally looking to squeeze any revenue they can out of a growing yet voiceless and hapless cohort, this ridiculous-sounding day may be closer than we think.. Be it seat preference, food, water, or check- in baggage, extra charges are being levied for virtually anything." Anjuli Bhargava writes about governance, infrastructure and the social sector. The views expressed are personal
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