India directs airlines to offer free seat selection for 60% of seats
The directive imposes a regulatory prohibition on charging passengers for selection of a minimum 60% of seats per flight, removing a paid ancillary revenue category for those seats. A trade group representing IndiGo, Air India and SpiceJet warned the loss of seat-selection revenue will compel airlines to raise airfares to recoup income.
Change
India directed the Directorate General of Civil Aviation (DGCA) to require airlines to allow free seat selection for at least 60% of seats on every flight.
Why it matters
Airline pricing teams face a binding restriction on charging for seat selection on a majority of inventory, removing a targeted ancillary revenue stream. Commercial teams must now recalibrate fare and ancillary packaging to comply with the new allocation requirement.
Implications
- — Airlines' revenue management and pricing teams must revise fare structures and rebalance ancillary bundles to recoup lost seat-selection income or accept lower margins.
- — Airlines' reservation and IT teams must update booking interfaces and distribution rules to make 60% of seats selectable free of charge or risk regulatory non-compliance and passenger disputes.
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