India orders airlines to provide free selection for 60% of seats
→Revenue-management teams cannot charge seat-selection fees for 60% of seats
Change
India mandated airlines to allocate at least 60% of seats without seat-selection fees, directing the Directorate General of Civil Aviation (DGCA) to require carriers to remove paid selection from booking systems.
Why it matters
Barring seat-selection charges on 60% of seats removes a recognised ancillary-revenue stream carriers use to offset rising operational costs. The Federation of Indian Airlines (FIA) says carriers will need to recover the shortfall through higher base fares and criticised the ministry for issuing the direction without stakeholder consultation.
Implications
- — Airlines' booking and IT operations teams must immediately remove paid seat-selection options for at least 60% of seats from all booking systems — continued charging risks breaching the Civil Aviation Ministry's DGCA direction and regulatory non-compliance.
- — Airlines' revenue-management and finance teams must immediately adjust published fare structures or absorb the resulting revenue shortfall, creating near-term financial pressure that carriers state will otherwise be recovered via higher base fares.
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Source
View on Economic Times