Explained — Why the government rolled back its 60% free flight seat allocation plan

The Centre on Thursday said it was putting in abeyance an order directing airlines to offer at least 60% of flight seats free of charge from 20 April, PTI reported.

The 18 March order from the civil aviation ministry had directed the Directorate General of Civil Aviation (DGCA) to ensure airlines allocated a minimum of 60% of seats for selection on any flight, free of any additional charges, to ensure fair access for passengers.

This comes at a time when the US-Israeli attacks on Ira, and the subsequent retaliation, has escalated.

Why did the government put its decision on hold?

In a letter to the DGCA, the civil aviation ministry said it reviewed the order following representations from airlines highlighting operational and commercial impacts.

“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,” the ministry said.

It noted that the provision will be kept in abeyance until further notice.

“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 Civil Aviation Ministry said in the communication to the DGCA.

Currently, Indian airlines are required to offer 20% of seats at no charge, with the remaining seats available for purchase. Seat selection typically costs between ₹200 and ₹2,100, depending on factors such as the front rows and extra legroom, a travel industry executive said last week.

Indian carriers warn of fare hike

The civil aviation ministry's order last month had directed the DGCA to ask airlines to allocate at least 60% of seats on any flight free of charge for selection, to ensure fair access for passengers. The order was scheduled to take effect from 20 April.

However, the move sparked resistance among airline companies, who warned they would be forced to raise fares and could also face revenue losses.

The Federation of Indian Airlines (which represents IndiGo, Air India and SpiceJet), on 20 March, wrote a letter to the government requesting steps in this regard.

“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.

Airfares skyrocket amid Middle East tensions

The US-Iran war has triggered a shortage of crude oil, due to which air turbine fuel prices were hiked more than 100% to over ₹2 lakh per kilolitre on 1 April in India. This came at a time when airlines are being forced to shut key routes due to airspace closures amid the war.

As a result, most Indian carriers introduced a fuel surcharge that currently range from ₹199 to ₹18,000 depending on the route.

In a move aimed at protecting domestic air travel from a sharp global fuel shock, the government has limited the increase in Aviation Turbine Fuel (ATF) prices for domestic airlines to 25%, even as international benchmarks indicated a potential surge of over 100%.