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IndiGo, Air India and SpiceJet have raised strong objections to the government’s decision asking airlines not to levy any charges for the selection of at least 60 per cent seats on flights, saying the move will force them to hike airfares to recover lost revenues.
The Federation of Indian Airlines (FIA), which represents the three airlines, has also urged the Civil Aviation Ministry to take steps to withdraw the decision.
According to PTI, The ministry announced that directions have been issued to the DGCA to direct airlines to allocate a minimum of 60 per cent of seats for selection on any flight free of charge to ensure fair access for passengers.
“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,” it said.
FIA noted that seat selection fees form a legitimate component of airline revenue, particularly in the high-cost environment where costs rise year-on-year under the regulator AERA-governed regime that accords full cost recovery plus an assured margin to airports.
“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,” the grouping said.
