Air India plans to start charging for food served to passengers on short duration flights of up to 60-90 minutes, senior airline officials said on Sunday.
Sources told Business Line that a tender has been floated and based on its evaluation, a decision will be taken on whether or not to introduce the new system on its short duration flights. Water, however, will continue to be available free-of-charge.
The implementation of the decision, which could be in place by the later half of the year, could mean that for flights say between Chennai to either Bangalore or Hyderabad, a passenger will have to pay for food.
The decision to consider implementing pay for food on board comes soon after Alliance Air, a 100 per cent subsidiary of Air India, introduced the concept in March this year charging Rs 40-100 for meals purchased on board. The rate which Air India plans to charge for food on board was yet to be firmed up, the sources indicated.
Leasing of Airbus A-320
Meanwhile, the airline will soon reissue a tender for leasing 14 Airbus A-320 aircraft which will be able to seat 180 passengers each in an all-economy configuration. Air India hopes to take delivery of these aircraft between now and 2017.
Both the moves are being viewed as an attempt by the airline to get a larger share of the domestic low-cost market which has been growing faster than the full service market.
Incidentally, IndiGo, SpiceJet and JetKonnect all charge for food on their flights.
Generating ancillary revenues
Air India is also exploring other avenues for generating ancillary revenues, including leasing out space, in some of its booking offices for banks to install ATM machines. The airline plans to start with leasing out office space in Delhi and Mumbai and then extend it to other cities in South India, the officials said.
It is also looking to sell the last of the three Boeing 777-200 Long Range aircraft and use the funds generated to retire some of its debt. The airline had earlier sold five Boeing 777-200 LR aircraft to Etihad Airways, a move which helped reduce its debt burden by nearly $350 million.