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Air India, IndiGo, SpiceJet Oppose Govt’s 60% Free Seat Rule, Warn Of Fare Hike
Air India, IndiGo, SpiceJet Oppose Govt’s 60% Free Seat Rule, Warn Of Fare Hike
In a major protest against the government’s latest dictum to reserve 60 per cent of flight seats as free, major flight operators – IndiGo, Air India and SpiceJet in unison have forewarned that they might consider hiking airfares in the near future to offset the losses.
The Federation of Indian Airlines (FIA), which represents the three airlines, has urged the Civil Aviation Ministry to withdraw the decision.
In a letter written to Civil Aviation Secretary Samir Kumar Sinha on Thursday, FIA said the direction would have unintended and adverse consequences for the aviation sector.
“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.
The body said that there’s a rising operational cost pressure, thinning their margins each year. In that scenario, airlines often rely on ancillary revenues to offset the operational costs, including fuel, maintenance, airport charges, etc.
Among other concerns, the grouping mentioned that the ministry did not carry out stakeholder consultations before announcing the decision.
“If applied, this measure will set a precedent for excessive intervention in ancillary pricing with heavy loss of revenues for the airlines, apart from creating uncertainty for airlines regarding future regulatory constraints," FIA said and urged that the mandate to the DGCA be withdrawn.
The government has restricted airlines to charge premium fee from customers to reserve some selected seats, which include front rows or extra leg room.
The Ministry of Civil Aviation has directed airline operators to ensure that at least 60 per cent of seats on any flight are allocated free of cost for selection.
While the new measure brings a major relief to passengers who are forced to pay extra fee to get good seats on the flights, major flight operators are expecting a loss of additional income from passengers who are willing to pay for extra comfort and luxury.
Source: News18
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