Airlines must make 60% of seats available without selection charges

MUMBAI/NEW DELHI: India has mandated airlines to offer up a majority of seats for choice without additional charges and seat passengers on the same booking together, a move that experts said could push airlines to raise base fares.

The ministry of civil aviation on Wednesday said it has issued directions through the Directorate General of Civil Aviation (DGCA) requiring all Indian airlines to make “at least 60% of seats” on every flight free of selection charges and ensure passengers on a common PNR be preferably seated on adjacent seats.

A formal order operationalising the directive was yet to be issued as of press time. A government official said DGCA will bring enabling provisions in the next few days.


The move is in response to increasing complaints from travellers over difficulty in getting free seats, and family members having to pay for seats to ensure they are seated together.

However, it impacts a key ancillary revenue stream for carriers, which helps airlines to keep the base fare low in one of the world’s most price-sensitive aviation markets, experts said. “India already has some of the lowest airfares globally, supported by ancillary revenues,” said Vishok Mansingh, chief executive of Vman Aviation consultancy and leasing company.

Legal or Not?
“Restricting these will push up pure vanilla (base) fares, ultimately hurting price-sensitive travellers who just want affordable point-to-point travel,” warned Mansingh of Vman.

There is also a question over the legality of the move.

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The current regulations, which came in 2014, permit airlines to charge separately for items like preferential seats, bags, and meals. Airlines are free to fix charges. DGCA can only intervene if airlines are found to violate principles of transparency and discrimination.

Also, in 2017, the Delhi High Court ruled that the regulator cannot determine the tariff for a specified flight product; it has to be determined by market forces.

The official cited above, however, contended that the government is not mandating any pricing for airlines but instead pushing the airlines to keep a certain portion of the seats free. “We are not in favour of interfering in commercial matters of airlines, but the government has to address it if a large section of the public complains,” he said.

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Passengers currently have the option to skip preferred seat selection, in which case the airlines assign a seat two hours before the departure. However, in many cases, passengers travelling together are seated separately unless they pay for preferred seats.

RECOVERING COSTS
“Ensuring passenger rights is very important, but it is equally important to balance the commercial interests of airlines, especially as Indian carriers remain structurally unprofitable,” said Kapil Kaul, chief executive and director of CAPA India, an aviation consultancy firm. “Ancillary revenues are key to profitability. Any regulatory action that impacts pricing must be studied in detail, otherwise we could see higher fares.

Kaul said Indian carriers are likely to post around $2.5 billion losses for FY26. In FY25, 10% of IndiGo’s total revenue came from such sources, as compared to the global average of around 16%.

Shares of InterGlobe Aviation, which operates IndiGo, however, didn’t react to the development and closed 1.71% higher at Rs 4,361.10 on the NSE on Wednesday as analysts expect that the airline will be able to recover the cost from higher fares.