REGULATORY · INDIA
Civil Aviation Ministry Orders 60% Free Seats
Change
The civil aviation ministry directed the Directorate General of Civil Aviation to require airlines to offer at least 60% of seats free of charge for passenger selection.
Why it matters
The ministry instructed the DGCA to implement a rule obligating carriers to make at least 60% of seats on flights available for selection without a fee. The requirement targets seat-selection as an ancillary charge previously sold on an opt-in basis. The Federation of Indian Airlines, representing major carriers, said the directive will have a significant financial impact and warned airlines will raise fares to recover lost revenues. The industry body referenced a 2017 Delhi High Court ruling that questioned the regulator's power to fix or cap charges for unbundled services offered transparently on an opt-in basis.
Implications
- · Reduction of ancillary revenue from seat-selection for carriers.
- · Airlines warned they will raise ticket prices to recover lost ancillary revenue.
- · Increased cross-subsidy of seat costs across all passengers, affecting price-sensitive travelers.
Who is affected
- · Airlines (carriers)
- · Airlines' revenue management and pricing teams
- · Price-sensitive passengers / budget travellers
- · Civil aviation regulator (DGCA)
Source
Topics
World & Politics Policy & Regulation Law & Public Safety Regulatory Actions