The Centre has suspended its recent directive requiring airlines to allow passengers to select at least 60 per cent of seats without paying a seat-selection fee, less than three weeks after announcing the move as part of a passenger rights push.
In a letter dated April 2 to the Director General of Civil Aviation (DGCA), the Civil Aviation Ministry said the provision would be kept "in abeyance till further orders" pending a "comprehensive examination of the issue", as reported by Hindustan Times. The decision comes after airlines raised concerns about the rule's impact on pricing structures and regulatory consistency.
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Airlines flag fare impact concerns
The rollback reportedly followed representations from the Federation of Indian Airlines (FIA) and Akasa Air. Airlines argued that mandating a large share of free seat selection could disrupt the current fare model, particularly under India's deregulated tariff regime.
Alongside the suspension, the government also announced that monthly increases in aviation turbine fuel prices for domestic flights would be capped at 25 per cent, HT reported. Both developments come amid financial pressure on airlines due to rising oil prices and route restrictions linked to the West Asia conflict.
What the original rule proposed
The March 17 circular had directed scheduled airlines to allocate a minimum of 60 per cent of seats on every flight without any selection charge. It also required passengers on the same booking to be seated together, preferably in adjacent seats. The ministry had presented these measures as an attempt to improve passenger convenience and standardise airline practices.
However, Thursday's order does not affect other parts of the earlier circular. The DGCA will continue to enforce provisions related to co-seating passengers on the same PNR, transparent policies for carrying sports equipment, musical instruments and pets, and clear disclosure of applicable charges.
Current seat pricing and industry response
At present, Indian airlines typically offer only 5 per cent to 15 per cent of seats without an additional fee during web check-in. Seats towards the front and window seats are usually priced higher as part of ancillary revenue models.
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The FIA, whose members include Air India, IndiGo and SpiceJet, had written to the Ministry on March 19 warning that the directive could backfire. It argued airlines would compensate for lost ancillary income by raising base fares. The group also cited a 2017 Delhi High Court ruling stating preferential seating is a valid unbundled service and that pricing should remain optional, transparent and non-discriminatory.
