Airlines vs govt: Air India, IndiGo, SpiceJet oppose Centre's 60 % free seat selection rule, warn of fare hike

IndiGo, Air India and SpiceJet have opposed the government’s directive barring airlines from charging for the selection of at least 60 per cent of seats, cautioning that the move may push up airfares.The Federation of Indian Airlines (FIA), representing the carriers, has called on the civil aviation ministry to reconsider the decision. In a letter to civil aviation secretary Samir Kumar Sinha on Thursday, the body said the directive could have unintended and adverse implications for the aviation sector. "The financial impact of the directive on airlines will be significant, compelling airlines to recover the lost revenues through increases in fares. As a result, all passengers, including those who may not wish to preselect seats, will end up paying higher fares," the letter said. The FIA said seat selection charges are a legitimate source of revenue for airlines, especially in a high-cost operating environment.It noted that costs continue to rise annually under the regulator Airports Economic Regulatory Authority (AERA) framework, which allows airports full cost recovery along with an assured margin."Airlines operate on thin margins and rely on ancillary revenues to offset rising operational costs, including fuel, maintenance, airport charges, etc. Imposing a uniform restriction on ancillary revenue undermines commercial flexibility and interferes with market-driven pricing mechanisms," FIA said, as cited by PTI.FIA also said that although free seat selection may seem advantageous to passengers, the broader impact could be adverse, with higher fares likely to limit affordability and reduce consumer choice.It said the decision could run counter to the goal of passenger welfare by converting optional, user-paid charges into a uniform fare increase for all travellers, disproportionately affecting price-sensitive passengers.The industry body also flagged the absence of stakeholder consultations, stating that the decision was introduced without prior engagement with the sector.“If applied, this measure will set a precedent for excessive intervention in ancillary pricing with heavy loss of revenues for the airlines, apart from creating uncertainty for airlines regarding future regulatory constraints,” FIA said, urging that the mandate issued to the Directorate General of Civil Aviation (DGCA) be withdrawn.On Wednesday, the ministry said it had directed the Directorate General of Civil Aviation (DGCA) to ensure that airlines offer at least 60 per cent of seats on every flight free of charge for selection, with the aim of providing fair access to passengers.The move comes amid growing concerns over airlines levying high fees for add-on services, including seat selection. Typically, carriers charge between Rs 200 and Rs 2,100 for selecting seats, depending on factors such as row position and additional legroom.Meanwhile, PTI sources said airlines have highlighted multiple operational pressures to the ministry, including a surge in jet fuel prices linked to the West Asia conflict.The situation has had a significant impact on flight operations to and from the region.