60% free airline seat rule was meant to help flyers! Why was it put on hold

Bengaluru: The Centre’s decision to put in abeyance its directive mandating airlines to offer at least 60% of seats free of charge from April 30 has drawn mixed reactions from the travel industry, with some backing the move as pragmatic while others flag concerns for passengers.

On March 18, the Civil Aviation Ministry had said it would direct the DGCA to ensure that a minimum of 60% of seats on any flight be available for selection without additional charges, in a bid to improve passenger access. However, on April 2, the directive was put on hold.

“The matter has been reviewed in light of representations received from the Federation of Indian Airlines and Akasa Air, highlighting operational and commercial implications of the above provision, including its potential impact on fare structures and consistency with the prevailing deregulated tariff regime... In view of the above, and pending a comprehensive examination of the issue, it has been decided that the provision relating to offering at least 60% of seats free of charge shall be kept in abeyance till further orders,” the ministry said in a communication to the DGCA, as quoted by PTI.

Reacting to the move, Indian Association of Tour Operators (IATO) President Ravi Gosain supported the decision, calling it “wise and timely”. He said halting the directive avoids disruption to airline economics. “The need for protecting passenger interests and the impacts resulting from regulatory changes without consultation from industry stakeholders could in some cases affect the financial viability of commercial airlines due to sudden disruption of airline economics. In the short term, this action provides much needed stability of operations and eliminates uncertainty for both airlines and travel agents,” he said.

Gosain added that a free seat selection mandate would have posed “significant challenges” to airlines that rely on dynamic pricing and ancillary services. “A requirement to provide free access to a substantial number of seats would distort the existing pricing models of airlines and result in limitations on the ability of airlines to optimise their yield management,” he said.

Industry insiders note that ancillary revenues — including seat selection and baggage fees — form a key part of airline earnings in a highly competitive market like India, where base fares are often kept low.

Rajiv Mehra, General Secretary of Federation Of Associations in Indian Tourism & Hospitality (FAITH), said such revenues account for about 5-7% of total income and help sustain margins. However, he struck a more cautious note. “While this kind of gives airlines extra revenue comfort, as they are under huge financial stress, it is detrimental to the interest of flyers since it puts extra financial burden on them,” he said, adding that passengers typically pay Rs 300-2,000 depending on seat type — such as front rows and extra leg room.

The original move had followed rising complaints over high ancillary charges. No airline was available for comment.