Why Centre has paused 60% free flight seats selection order
What's the story
The Indian government has suspended its recent directive mandating airlines to offer at least 60% of flight seats for free. The decision comes after concerns were raised by the Federation of Indian Airlines and Akasa Air over potential operational and commercial implications, including effects on fare structures. The original order was issued on March 17 and was to be implemented from April 20.
Industry response
FIA, Akasa Air warn of revenue losses
The original directive had directed the Directorate General of Civil Aviation (DGCA) to ensure airlines reserved a minimum of 60% of seats for free selection on any flight. However, this move was met with resistance from airline companies, who warned it could lead to increased fares and revenue losses. The Federation of Indian Airlines (FIA), which represents IndiGo, Air India, and SpiceJet, had written to the government on March 19 expressing these concerns.
Financial implications
FIA's letter to government
In its letter, the FIA warned that the directive would have a significant financial impact on airlines. "The financial impact of the directive...will be significant, compelling airlines to recover the lost revenues through increases in fares. As a result, all passengers, including those who may not wish to preselect seats, will end up paying higher fares," it said. The ministry acknowledged these concerns in its latest communication and decided to keep the provision in abeyance until further notice.
Government
What Civil Aviation Ministry said in communication to DGCA
"The matter has been reviewed in light of representations received from the Federation of Indian Airlines and Akasa Air, highlighting operational and commercial implications of the above provision, including its potential impact on fare structures and consistency with the prevailing deregulated tariff regime," the Aviation Ministry said. "In view of the above, and pending a comprehensive examination of the issue...the provision relating to offering at least 60% of seats free of charge shall be kept in abeyance till further orders."
Fuel price cap
Government caps monthly ATF price hikes for domestic flights
The government had also earlier announced a cap on monthly hikes in aviation turbine fuel prices for domestic flights to protect domestic air travel from a sharp global fuel shock. The cap is set at 25%, which comes as a relief amid rising oil prices and route restrictions due to the West Asia conflict. Currently, Indian airlines are required to offer 20% of seats for free selection with additional charges for preferred seating options during web check-ins.