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ancillary revenue

New Delhi, India: The Ministry of Civil Aviation has placed on hold its directive requiring airlines to offer at least 60 per cent of seats on every flight without additional seat selection charges, effectively pausing a key passenger-rights reform introduced last month. According to official communication cited by the Directorate General of Civil Aviation (DGCA), the provision has been kept “in abeyance till further orders” pending a comprehensive review of its operational and commercial implications. The directive, announced on March 18, 2026, had proposed that airlines make a majority of seats available for free selection at the time of booking. It also aimed to address long-standing passenger concerns over paid seating preferences and family members being separated during allocation. However, the ministry has now paused implementation after receiving representations from airline operators and industry bodies, including the Federation of Indian Airlines (FIA), which represents major carriers such as IndiGo, Air India, and SpiceJet. Airlines had strongly opposed the move, arguing that seat-selection fees form a significant portion of their ancillary revenue. Industry stakeholders warned that limiting this income stream could force carriers to increase base fares across the board, potentially impacting overall affordability for passengers. According to the ministry’s communication to DGCA, the decision to pause the directive was taken after reviewing concerns related to “operational and commercial implications,” as well as consistency with India’s deregulated airfare framework. Under the current system, airlines are permitted to independently price services such as preferred seating, baggage, and meals, with regulators intervening only in cases of unfair or non-transparent practices. The suspended directive was originally introduced as part of a broader effort to improve transparency in airline pricing and address complaints regarding “dark patterns” in seat allocation, where passengers often end up paying extra to avoid random seating. At present, airlines typically offer only 20% share of seats free of charge, with the rest subject to selection fees that vary depending on seat location and demand. The ministry has not indicated a timeline for a revised framework, stating that the matter remains under examination. With the directive now on hold, airlines will continue operating under the existing seat selection policy until further notice. The government is expected to reassess the balance between consumer protection and airline financial sustainability before issuing a revised order.

Govt Puts 60% No-Fee Seat Selection Rule On Hold Amid Airline Revenue Concerns

Aviation Today News Desk / April 3, 2026

New Delhi, India: The Ministry of Civil Aviation has placed on hold its directive requiring airlines to offer at least […]

Govt Removes Fare Caps As Airlines Oppose 60% Seats Free Of Selection Charges SEO DES: Authorities want fair fares, but airlines warn lost add-on revenue may push base prices up, raising concerns over pricing freedom and financial strain SOCIAL: The government’s move to mandate 60% free seat selection and scrap fare caps has drawn strong opposition from airlines, which warn it could lead to higher ticket prices. While authorities have asked carriers to keep fares reasonable and transparent, airlines argue the loss of ancillary revenue may force them to raise base fares, raising concerns over pricing freedom, financial strain, and market impact. The earlier fare caps, which set limits based on distance, have now been withdrawn from March 23, 2026, restoring pricing flexibility to airlines. However, the move signals a shift toward self-regulation, with the government expecting airlines to balance affordability with market-driven pricing. New Delhi, India: A policy push by the government to strengthen passenger rights and enforce fare transparency has triggered sharp resistance from India’s leading airlines, setting the stage for a broader debate over pricing freedom and regulatory oversight in the aviation sector. The Ministry of Civil Aviation, through the Directorate General of Civil Aviation (DGCA), has directed carriers to ensure that at least 60% of seats on every flight are available for free selection, a move aimed at reducing ancillary charges and allowing passengers, particularly families booked under a single PNR, to be seated together without paying extra. The directive comes alongside a broader advisory asking airlines to maintain fares that are “reasonable, transparent and commensurate with market conditions,” even as the government transitions away from direct fare controls. Major carriers including Air India, IndiGo and SpiceJet have opposed the 60% free seat selection mandate, arguing that it interferes with their commercial pricing models and could have unintended financial consequences. Represented by the Federation of Indian Airlines (FIA), these carriers have formally approached the government, stating that seat selection fees form a critical component of ancillary revenues in an industry already operating on thin margins. Airlines contend that such non-ticket income helps offset high operating costs, including fuel, maintenance, and airport charges, and that restricting it would disrupt their financial balance. The government’s latest stance also marks a significant shift in its fare regulation approach. In its December 6 order, the ministry had imposed fare caps on economy class tickets, limiting prices to ₹7,500 for routes up to 500 km, ₹12,000 for distances between 500 and 1,000 km, ₹15,000 for sectors ranging from 1,000 to 1,500 km, and ₹18,000 for routes beyond 1,500 km, excluding taxes and additional fees. However, with operations now stabilised, the ministry has announced that these caps “shall stand withdrawn with effect from March 23, 2026,” effectively restoring pricing flexibility to airlines while simultaneously cautioning them against excessive or opaque fare structures. Airlines have warned that the combination of removing ancillary revenue streams through mandatory free seat allocation and expecting fare restraint could create financial strain. Industry executives argue that instead of lowering travel costs, the policy may inadvertently push up base fares as carriers attempt to recover lost income. This, they say, could neutralise the intended benefit for passengers and lead to a redistribution of costs rather than an actual reduction in overall ticket prices. The industry has also raised concerns about regulatory overreach, maintaining that fare determination in a competitive market should remain dynamic and driven by demand-supply factors. The market response has reflected these concerns, with airline stocks reacting negatively following the announcement, highlighting investor apprehension over potential revenue impacts. The ancillary revenues, including seat selection, baggage fees, and onboard services, have become an increasingly important part of airline business models globally, and any disruption to this stream could have wider financial implications. For passengers, the new framework promises immediate relief in terms of fewer add-on charges and improved seating convenience, particularly for families and groups. At the same time, the removal of fare caps theoretically allows for more competitive pricing, but also raises the risk of price volatility if not closely monitored. The government’s approach indicates a shift toward a hybrid model, where airlines are given pricing freedom but are expected to exercise self-regulation under regulatory scrutiny.

Govt Removes Fare Caps As Airlines Oppose 60% Seats Free Of Selection Charges

Aviation Today News Desk / March 24, 2026

New Delhi, India: A policy push by the government to strengthen passenger rights and enforce fare transparency has triggered sharp

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