Low-cost airlines high on wooing passengers

Mumbai, May 20: Low-cost airlines are vying with one another to make lucrative announcements to woo over 65 million domestic air passengers in the country.

The latest in line was Siddhanta Sharma's Spice Jet which tied up with insurance major Tata AIG to insure Spice Jet fliers.

The airlines has offered a life cover of Rs seven lakh rupees to customers, while baggage losses, flight delays, trip interruptions and cancellations will also come under its purview.

According to industry sources, nearly 40 per cent of domestic travellers opted for low-cost carriers last year despite frequent delays and trip curtailments. This fact has attracted the industry players to the low-cost segment.

Tata AIG, a joint venture between Tata group and American International Group (AIG), is understood to have begun talks with other low-cost air carriers including Air Deccan and Air Sahara (which was recently acquired by Jet) and is likley to expand the insurance cover to other low-cost airlines soon if things go well.

''The domestic airlines in India is all set to scale new heights with the rapid rise in the number of domestic low-cost fliers. We would like to launch the programme across other airlines in due course,'' AIG president Charles Bouloux told sources.

Though almost all insurance firms offer travel insurance cover for customers, Tata AIG's ''Travinsure'' has come out with a bulk coverage for fliers with a 30-day validity period and a single premium of Rs 129.

On the other side, the airline's bid to introduce insurance scheme for customers has drawn flak from critics who dub it as an indirect admission of the vulnerability of Spice Jet to passenger discomforts.

Meanwhile, Spice Jet strategy has reportedly provoked other insurance companies to come up with similar plans in months ahead, said reliable sources.

''Insuring air passengers is a novel trend in domestic insurance sector. We are also studying the feasibilities of launching a similar product,'' said a senior official with Bajaj Allianz to sources on conditions of anonymity.

UNI