The move could mark a significant shift in the airline’s product strategy

Tata Group-owned Air India is understood to be planning the introduction of unbundled fares on around 20 sectors, industry sources told businessline.

The move could mark a significant shift in the airline’s product strategy and bring aspects of its offering closer to global “light fare” models.

Sources said the airline has identified nearly 20 domestic sectors where certain services currently bundled into the ticket price could potentially be offered on a pay-if-you-use basis, “though this will be optional for passengers”. 

The proposal is understood to be under evaluation and may involve the unbundling of complimentary meals in Economy Class under a new fare category at a lower price. Complimentary meals would continue to be included in the existing fare categories offered by the airline. 

Fare flexibility

The new opt-in fare category would not be applicable to Premium Economy or Business Class and that it is aimed at providing greater fare flexibility to passengers, stimulating demand on price-sensitive routes and creating additional ancillary revenue streams.

The moved could allow the airline to introduce lower entry-level fares on select sectors while enabling passengers to customise their travel experience by purchasing additional services as required.

At present, ancillary revenues have become an increasingly important component of airline earnings globally, with several network carriers offering “Basic Economy” or “Light” fare products that exclude services such as checked baggage and complimentary meals.

While some industry insiders opine that the move could potentially raise questions on Air India’s positioning as full-service carrier, others argue that the model has been adopted by several major global FSCs in matured markets such as the US and Europe, where passengers are only served a small snack like peanuts or cookies along with water or juice on domestic flights. 

Similarly, details regarding any possible changes to baggage entitlements or onboard meal offerings have not yet been disclosed.

In addition, sources said that if implemented, the initiative could represent the first phase of a broader fare segmentation strategy aimed at better competing across different customer segments while improving route profitability and ancillary revenue generation.

Published on June 16, 2026