A recent government regulation mandating that airlines allocate 60 per cent of their seats for free selection has sparked significant backlash from the airline industry. The Federation of Indian Airlines (FIA), which encompasses major carriers including IndiGo, Air India, and SpiceJet, has formally expressed its apprehensions in a letter addressed to Civil Aviation Secretary Sameer Sinha. The FIA argues that this directive could negatively impact airline revenues, ultimately resulting in higher fares for passengers.

Financial Impact on Airlines Highlighted

In its correspondence, the FIA emphasized the potential financial ramifications for airlines. The organization noted that the directive would likely undermine a crucial source of income, prompting airlines to pass on the costs to consumers through increased ticket prices. The FIA’s letter stressed that while the intention behind the rule may be to enhance passenger benefits, it could ultimately prove to be detrimental.

Regulatory Overreach Questions Raised

The FIA has also raised questions about the extent of regulators’ involvement in commercial matters within the airline industry. It criticized what it terms “regulatory overreach” into core business decisions, including pricing and seat allocation strategies. Additionally, the FIA has challenged the authority of the Directorate General of Civil Aviation (DGCA) regarding its ability to regulate airfare components and separately charged services. The FIA pointed to previous judicial decisions that specify the limits of regulatory authority in these matters.

Free Seat Selection’s Broader Implications Discussed

Although the FIA acknowledged that free seat selection might seem advantageous at first glance, it cautioned against the broader implications of the directive. The organization warned that overall fare increases might diminish consumer access and options, particularly affecting frequent flyers, families, and budget-conscious travelers. The FIA further contended that a uniform seat allocation system across airlines could hinder service differentiation, limiting passengers’ ability to choose airlines based on personal preferences.

Claims of Lack of Consultation with Airlines

The federation disputes assertions that airlines were adequately consulted prior to the issuance of the directive. It pointed out that the mandate was not communicated to member airlines before the public announcement made on March 18, 2026. The FIA described the absence of stakeholder consultation as problematic and emphasized the need for dialogue with industry players before implementing such directives.

Call for Reconsideration of the Directive

In light of these concerns, the FIA has urged the Ministry of Civil Aviation to withdraw the directive. They cautioned that enforcing this rule could set a precedent for increased regulatory intervention in airline pricing practices, creating uncertainty for airlines regarding future regulatory measures. The FIA has implored the government to reassess the situation in order to protect the interests of the aviation sector.

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