Government Puts Airline Seat Rule on Hold After Industry Pushback

Facing industry pressure, the government has temporarily suspended its rule mandating airlines to offer 60% of seats for free, raising questions about airfare costs and airline revenue models.

The government has put in abeyance its direction requiring airlines to offer at least 60 per cent of seats on flights without any additional charge. The move comes following industry representations over the likely impact on fares and the sector's pricing structure.

In a communication issued on Thursday, the civil aviation ministry said the provision mandating free selection of at least 60 per cent seats would be kept in abeyance till further orders, pending a comprehensive review.

The ministry noted that it had examined representations from the Federation of Indian Airlines (FIA) and Akasa Air, which highlighted operational and commercial implications, including concerns around fare structures and consistency with the deregulated tariff regime.

The directive, announced on March 18, had asked the Directorate General of Civil Aviation (DGCA) to ensure that a minimum of 60 per cent of seats on every flight be made available for selection without any extra charge from April 20.

'It had also proposed that passengers booked under the same PNR be seated together. Airlines had opposed the move soon after it was announced.

Airline Industry Concerns

In a letter dated March 19, the FIA -- whose members include Air India, IndiGo and SpiceJet -- described the directive as a regulatory overreach into commercial aspects of airline operations and warned that it would lead to higher airfares and reduced affordability.

The grouping argued that seat selection fees are a legitimate source of revenue, especially in a high-cost environment, and that airlines rely on ancillary streams such as baggage, meals and preferred seating to offset rising expenses, including fuel, maintenance, and airport charges.

It cautioned that any loss of such revenue would likely be recovered through an increase in base fares, affecting all passengers.

Industry executives say airlines typically charge between ₹200 and ₹2,100 for seat selection depending on factors such as seat location and legroom. At present, around 20 per cent of seats are available without charge.

The FIA also pointed to legal and regulatory considerations where optional offerings are priced separately from the base fare.