Media365
IndiGo, India’s largest carrier, has announced a new fare option called “IndiGo Lite”. The fare class, which is available only for economy passengers, is an additional option introduced alongside the three that already exist. Passengers booked on the “IndiGo Lite” fare will be allowed only cabin baggage, marking the return of “cabin-baggage-only fares” to Indian skies—an experiment tried and dropped in the past.
Moving in tandem with Air India, which
recently introduced meal-free “Basic” fares on select sectors, the market leader is reviving a tried, tested, and once-abandoned fare class. Unlike Air India, however, IndiGo will also offer this fare class on international routes.
Hand-baggage-only fares were first launched in India in 2015 by SpiceJet, then a fledgling airline. The move created an uproar at the time, prompting the regulator to issue rules around the unbundling of services. These regulations underwent multiple changes, ultimately enforcing an “opt-in” instead of an “opt-out” approach to make them more customer-friendly. This means airlines could not set this fare as the default option; instead, passengers needed to actively choose it if they wanted a stripped-down offering. The concept ultimately failed to take off in Indian skies, even as airline after airline tried and parked it. Currently, Air India Express, the wholly owned subsidiary of Air India, offers hand-baggage-only fares under a class that, coincidentally or not, is also named “Lite.”
Customers opting for this fare will have their seats auto-assigned at no extra cost. According to current pricing on IndiGo’s website, the fare reduction is marginal, hovering around Rs 300 in most cases, though it varies based on the sector and flight length.
Global norms coming to India?
Globally, hand-baggage-only fares are standard practice for both low-cost and full-service carriers. British Airways, Lufthansa, SWISS, Air France and KLM, as well as North American carriers like United and American, offer these fares on select routes. The fares are typically significantly lower, justifying quicker turnarounds and reduced baggage-handling costs. The real gains are twofold: the saved cargo space is repurposed for commercial freight, which generates its own revenue stream.
However, global norms often clash with local ground realities. Indian travellers are known to pack heavily, and the 7 kg cabin limit is not always strictly enforced across flights and airports. Meanwhile, global low-cost giants like AirAsia, Ryanair, EasyJet and Wizz Air use hand-baggage-only fares as their base option, a practice fully permitted by law in their respective jurisdictions.
Simplification is the key
The Air India Group and IndiGo together control nearly 90% of India’s domestic market. In a market that is still growing and not yet as mature as Western aviation markets, introducing new fare classes is likely to cause confusion. For IndiGo’s “Lite” fares and Air India’s “Basic” fares, the reliance on direct booking channels presents a challenge, given India’s heavy penetration of Online Travel Agencies (OTAs) and offline travel agents.
With this addition, IndiGo’s economy lineup will feature four options: Saver, Flexi Plus, IndiGo UpFront and IndiGo Lite. This is in addition to IndiGo Stretch and Stretch+ on routes offering its business-class product, Stretch. The airline also offers SME and Corporate fares, which are not open to the general public.
IndiGo would not launch a new class without data to back it up. Airlines know exactly how many passengers travel without checked bags and whether a market exists for such an offering. Passengers will also retain the ability to add frills, including baggage, after booking a Lite fare. Does this make the proposition overly complex? For the average passenger simply looking to get from point A to point B, it probably does. But as Indian aviation expands, a market seems to be emerging for every tier — from Air India’s Basic fares to the Lite fares of Air India Express and now IndiGo. Meanwhile SpiceJet, the pioneer of these fares in India, is currently sidelined by internal struggles, with its market share slipping below 3%.
