Air India is taking measures to boost its ancillary revenues. The services will include services, insurance and packages among others.
According to sources, the airline is focusing on boosting its ancillary revenues segment. “We are planning to add packages to the platform. We have also partnered with Mojoboxx to provide cab services. We have also added insurance services. We will also be integrating new payment solutions such as partnering with banks, and other partners. We have also partnered to integrate the HDFC Tata Neu Credit Card. So will will have similar partnerships with other players as well.”
The airline has recently partnered with AccessRail to provide intermodal services to its passengers. The airline will soon integrate it to the website as well, the person added.
The website is also likely to include multiple options on seat as well as food and beverage solutions, the person indicated. Air India, however, did not respond to BusinessLine’s query.
Five-year goal
Air India has set a five-year goal under Vihaan.AI. The plan was focused on five aspects including customer experience, robust operations, industry-best talent, industry leadership, and commercial efficiency and profitability. The airline completed the first phase (Taxiing Phase), as of September, the airline’s ancillary revenues have gone up from ₹84 crore to ₹125 crore, a 48 per cent increase. The next phases include Take Off & Climb phases.
According to industry experts, ancillary revenues is seldom focused on. CAPA India briefing says, In the 10 years to FY2020, traffic has grown at a CAGR of 13.2 per cent , but non-passenger revenue has grown at only 4.1 per cent . However, at Ryanair, non-passenger revenue grew at around 1.5x traffic from FY2014 to FY2020, despite being in a mature market. “Ancillaries have simply not been a focus. Even hand baggage only fares are not being marketed with intensity,” it said.
Cargo gained attention only through compulsion, but is now recognised for the contribution it can make, noted CAPA India. “A similar focus should be given to ancillaries. Airlines in India are focusing only on fares. Without a strategic focus on ancillaries, structural profitability is not feasible. Rather than a one-size-fits-all proposition, ancillaries can drive increased customisation for the passenger, while delivering higher revenue,” it added.