Indian Airlines Write To Civil Aviation Ministry Against 60% Free Seat Selection Mandate

Days after the government directed airlines not to charge fees from passengers for selecting at least 60 percent of flight seats, major operators in the country have opposed the move.

They have written to the Union Ministry of Civil Aviation stating that letting go of seat selection charges may trigger fare hikes to recover lost revenue, according to a report by the Press Trust of India.

Through their consortium, the Federation of Indian Airlines (FIA), companies such as IndiGo, Air India, and SpiceJet have requested the ministry to withdraw the order.

The three companies account for more than 80 percent of the market share. Seat selection fees are often charged by airlines to allow passengers to select their preferred seats. Such fees are generally levied on window seats, aisle seats, front-row seats, or seats with extra legroom.

The fee usually ranges from Rs 150 to over Rs 2,000 for preferred seats.

“The financial impact of the directive on airlines 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,” the federation argued in the letter to the ministry.

It said that seat selection fees are legitimate, particularly when airlines are operating on thin margins.

“Airlines operate on thin margins and rely on ancillary revenues to offset rising operational costs, including fuel, maintenance, airport charges, etc. Imposing a uniform restriction on ancillary revenue undermines commercial flexibility and interferes with market-driven pricing mechanisms,” the federation said.

It also said that stakeholders were not consulted before taking the decision, which amounts to “excessive intervention.”

“If applied, this measure will set a precedent for excessive intervention in ancillary pricing with heavy loss of revenues for the airlines, apart from creating uncertainty regarding future regulatory constraints,” FIA said.