Summary
- Air India Express is increasing its revenue from ancillary services, which now account for 14-15% of its overall revenue.
- The airline plans to further expand its ancillary revenue and aims to increase it to 20% in the near future.
- With new management and financial backing, Air India Express is focused doubling its daily departures and market share in the coming years.
Low-cost airline Air India Express has upped its revenue from ancillary services in recent times. While the airline focuses on offering competitive budget fares to its passengers, it is now increasingly making money from food and travel services, among other things.
Ancillary revenue increase
Air India Express is increasingly offering several products and services that contribute to its overall revenue. According to a report by businessline, the airline’s ancillary revenue now accounts for around 14-15%, with a further increase expected in the near future.
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In recent months, Air India Express has offered several new products, including gourmet meals and other inflight and airport services. The new management under the Tata Group is clearly leaving no stone unturned to increase the revenue stream. businessline quotes a source as saying,
“The (sic) are mainly divided in four sections; food, baggage, inflight services and travel services. For example, for food, we have our brand Gourmair under which we keep updating our menu. Under inflight services, we have additional seats, inflight entertainment etc.”
“We have services like cabin carry on luggage which allows you to carry your check in bag in the cabin, or fees for special equipment, we also have services which allows you to pre book your extra baggage. In all, we have a total of 20 such products and services through which we charge a premium besides the seats.”
Aiming for more
The carrier is also creating more room for ancillary revenue, with sources saying that the current 14-15% figure could go as high as 20% in the near future. Indeed, Aloke Singh, CEO of Air India Express, spoke recently at the WINGS India event in Hyderabad and stressed that “ancillary revenue will be a strong focus area for us in the coming fiscal. It has a great potential, and our teams are working on newer product and services to boost the non-passenger revenue.”
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CAPA India also notes that carriers in India need to focus not just on fares but ancillaries as well. It went on to say that a strategic focus on ancillary services is needed to achieve structural profitability. In that sense, Air India Express seems to be headed in the right direction.
Eying more market share
Air India Express received a new lease on life when it was privatized along with its parent airline, Air India, two years ago. This came with a kind of financial backing and new management, unlike anything the carrier had seen before.
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And the carrier already has high hopes for the future. It plans to double its daily departures by the end of the financial year 2025 and also wants to have twice its current market share in the next five years. With dozens of new planes slated to join its fleet in the coming years, that plan certainly looks achievable.
Air India Express Eyeing Twice The Market Share In 5 Years
The airline expects to receive 40 new aircraft this year.
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