A FRIEND WHO ALONG with her husband recently went to Europe for the first time on a shoestring budget got a taste of how low-cost airlines manage to turn a profit there. She was unaware of a Ryan Air rule that unless passengers do a web check-in three hours before a flight, they will have to fork out £55. Just this unexpected component for one flight worked out to about 5 per cent of their total tour cost. In the West, such ‘penalties’ to make up for low ticket prices are seen as a regular business model. In India, it is a different cup of tea.
Recently, Indigo linked all web check- ins to paid seat selection and thus inverted the model. If Ryan Air charged for not checking in online, Indigo decided to charge for checking in online. Why it did is something we will never know, but is probably the result of managers brainwashing themselves with jargon like ‘innovative disruption’. In any case, the anger it evoked was so intense and unexpected that Indigo beat a quick retreat. On November 25th, it had tweeted in response to a query: ‘As per our revised policy, all seats will be chargeable for web check-in. Alternatively, you may check-in at the airport for free. Seats will be assigned as per the availability’. And a day later in a statement, it did its U-turn: ‘IndiGo customers will NOT compulsorily have to pay for the seats. The pricing is only for advance selection of seats… If the passengers have no particular preference for seats and would not like to pay for advance seat selection, they can either reserve any free seats available at the time of web check-in or will, of course, be assigned seats at the time of airport check-in’.
Indigo is merely trying to squeeze out revenue, but what does the episode illustrate of the Indian consumer who thinks that web check-in is part of his rights. It is not. Any business has a right to charge whatever it wants for a service that it offers so long as it is reasonable. An example of an unfair practice would be what banks charge for closing your account with them. What can be the cost incurred on closing something? There is really no service that a bank is providing either in doing that.
In the Indigo web check-in case, the fee covers an additional convenience along with an alternative. A customer who wants a free check-in just has to stand in a queue at a counter in the airport. Neither does he need to buy only an Indigo ticket. There are other carriers. The reason for the umbrage is that over the past few years, the Indian middle-class has grown used to freebies. Businesses, from Ola to Flipkart, have been subsidising the customer out of their own pockets. Their long-term plan is to capture the market and then make the customer pay, a stage still far away. Meanwhile, when a business like Indigo tries to test the waters, the customer reacts as if it is a personal insult. To frighten businesses into being cheap is good so long as it works, but all good things do end. Airlines need to survive to give free web check-ins.