IndiGo, Air India, and SpiceJet have formally opposed a recent directive issued by the government mandating airlines to allocate at least 60 percent of seats for selection at no charge. The airlines argue that this measure could compel them to raise airfares as a means to recover revenue losses. The Federation of Indian Airlines (FIA), representing these carriers, has urged the Civil Aviation Ministry to reconsider its decision, stating that it would have serious negative repercussions for the aviation sector.

Government Mandate Aimed at Ensuring Fair Access

On Wednesday, the Civil Aviation Ministry announced that it has instructed the Directorate General of Civil Aviation (DGCA) to enforce the policy aimed at making flight seat selection more accessible to passengers. In a letter addressed to Civil Aviation Secretary Samir Kumar Sinha, the FIA expressed that while the intention behind the directive may be to support passenger welfare, the financial ramifications for airlines could be significant and counterproductive.

Seat Selection Fees: A Key Revenue Source

The FIA emphasized that fees collected from seat selection represent an important aspect of airline revenue, especially in an environment marked by escalating operational costs. According to the airlines, seat selection fees generally range from Rs 200 to Rs 2,100, depending on various factors, including the proximity to the front of the aircraft and additional legroom. The FIA cautioned that a blanket ban on such ancillary revenues would limit commercial flexibility and disrupt market-based pricing mechanisms.

Concerns About Passenger Affordability and Choice

While the FIA acknowledged that the policy may initially seem advantageous for passengers, they argue that the resulting fare increases would ultimately reduce consumer choice and affordability. The organization pointed out that the directive could defeat the government’s intention of promoting passenger welfare, as it may lead to a universal fare hike rather than targeted fees for specific services that some passengers might opt for.

Call for Stakeholder Consultation

In their communication with the Civil Aviation Ministry, the FIA raised concerns regarding the lack of consultation with stakeholders before the announcement of the directive. They highlighted that implementing this measure could establish a precedent for undue government intervention in ancillary pricing, leading to substantial revenue losses for airlines and creating uncertainty regarding future regulations.

Impact of External Challenges on Airlines

In addition to expressing concerns over the seat selection policy, the airlines informed the ministry about various operational challenges they are currently facing. Rising jet fuel prices amidst ongoing conflict in West Asia have notably affected flight operations to and from that region, further complicating the financial landscape for these carriers.

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