Aviation Ministry Suspends 60% Free Seats Directive Following Airline Pressure
In a significant policy reversal, the civil aviation ministry has put on hold its order requiring airlines to allocate at least 60% of seats free of charge. This decision comes after intense lobbying from major carriers, who warned that the move could lead to fare hikes and operational disruptions.
Background of the Controversial Order
On March 17, the ministry directed the Directorate General of Civil Aviation (DGCA) to implement rules mandating that airlines offer a minimum of 60% of seats without extra charges. The regulator subsequently amended existing regulations to enforce this provision, with an effective date set for April 20. However, the directive faced immediate backlash from the airline industry.
Reasons for the Suspension
On Thursday, the ministry issued a new order, asking the DGCA to keep the earlier directive in abeyance. The ministry cited representations from the Federation of Indian Airlines, which includes IndiGo, the Air India group, SpiceJet, and Akasa Air. These carriers highlighted the operational and commercial implications of the rule, particularly its potential impact on fare structures and consistency with India's deregulated tariff regime.
The order stated: "The matter has been reviewed in light of representations received... highlighting operational and commercial implications of the above provision, including its potential impact on fare structures and consistency with the prevailing deregulated tariff regime."
It further clarified: "...it has been decided that the provision relating to offering at least 60% of seats free of charge shall be kept in abeyance till further orders."
Airlines' Concerns and Industry Response
Airlines argued that the free seat mandate would curb their ancillary revenue, a critical income stream, especially amid rising cost pressures since the onset of the Iran conflict. They warned that this could force additional fare increases, burdening passengers.
An industry executive explained: "Paid seat selection is an 'opt-in' service designed for passengers who prioritise specific preferences. Free seats create a cross-subsidy, where costs of 'free' seats are indirectly absorbed by other value-conscious customers. Also, seat selection would be counterproductive for families or elderly passengers as all good seats would be allocated by passengers booking first, leaving a low number of seats available for such people."
Continued Enforcement of Other Measures
Despite suspending the free seats rule, the ministry reiterated that the DGCA should ensure continued enforcement of other passenger facilitation measures. These include:
- Transparency in seat allocation
- Co-seating of passengers on the same PNR
- Carriage of musical instruments, sports equipment, and pets
- Clear disclosure of applicable charges
This move underscores the ministry's commitment to balancing consumer interests with the financial viability of airlines, as the industry navigates challenging economic conditions.
