The Center on Thursday said it was shelving the order directing airlines to offer at least 60% of flight seats free from April 20, PTI reported.
A Ministry of Civil Aviation order dated March 18 directed the Directorate General of Civil Aviation (DGCA) to ensure that airlines allocate a minimum of 60% seats for selection on any flight without any additional charges to ensure fair access for passengers.
Why did the government postpone the decision?
In a letter to the DGCA, the civil aviation ministry said it reviewed the order based on statements from airlines that highlighted the operational and commercial impacts.
“The matter was reviewed in view of the representations received from the Federation of Indian Airlines and Akasa Air, highlighting the operational and commercial implications of the above provision, including its potential impact on the fare structure and compliance with the prevailing deregulated fare regime,” the ministry said.
She noted that this provision would be suspended until further notice.
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“In view of the above and pending a full investigation of the issue, it has been decided that the provision of offering at least 60% free seats will be suspended till further orders,” the civil aviation ministry said in a DGCA release.
Currently, Indian airlines are required to offer 20% of seats for free, with the remaining seats available for purchase. Seat selection usually comes between ₹200 a ₹2,100, depending on factors such as front rows and extra legroom, a tourism executive said last week.
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Indian carriers warn against fare hikes
A civil aviation ministry order last month directed the DGCA to ask airlines to allocate at least 60% seats on any flight free of charge to ensure fair access for passengers. The regulation was supposed to take effect on April 20.
But the move has sparked backlash among airlines, which have warned they will be forced to hike fares and may also face revenue losses.
The Federation of Indian Airlines (which represents IndiGo, Air India and SpiceJet) wrote a letter to the government on March 20 seeking action in this regard.
“The financial impact of the directive on airlines will be significant and will force airlines to recoup lost revenue through fare increases. As a result, all passengers, including those who may not wish to pre-select their seats, will pay higher fares,” it said.
Airline prices are soaring amid tensions in the Middle East
The US-Iran war caused an oil shortage, causing air turbine fuel prices to rise more than 100% to more than ₹2 lakh per kiloliter on April 1 in India. This comes at a time when airlines are being forced to close key routes due to airspace closures in the middle of the war.
As a result, most Indian carriers have introduced a fuel surcharge that currently ranges from ₹199 to ₹18,000 depending on the route.
In a move to protect domestic aviation from a sharp global fuel shock, the government has capped aviation turbine fuel (ATF) price hikes for domestic airlines at 25%, even as international benchmarks indicated a potential increase of more than 100%.
Key things
- The government’s original mandate aimed to ensure fair access for passengers by requiring airlines to allocate 60% of free seats.
- Airlines have expressed concern that the directive will lead to higher ticket prices for all passengers.
- The government’s decision to scrap the plan highlights the need for careful consideration of operational impacts and tariff structure in the airline industry.
