Paid-for seats in airlines might be capped at a fourth

Source : BUSINESS_STANDARD
By : Sharmistha Mukherjee
Last Updated: Wed, Jun 26, 2013 20:21 hrs
An IndiGo Airlines A320 aircraft is parked on the tarmac at Bengaluru International Airport in Bangalore

Even as airlines such as IndiGo and GoAir have announced charges for pre-booking nearly all seats, to boost earnings from ancillary revenue streams, the ministry of civil aviation is considering issuing a notification early next month to cap the number of preferred seats at 25 per cent of the overall capacity on domestic flights.

A senior ministry official said, "There has to be a limit on the number of seats that can be tagged preferential in a flight. We have asked the Directorate General of Civil Aviation (DGCA) to issue a notification to restrict the number of seats of choice to 25 per cent of the available capacity per flight."


Under current norms, IndiGo and GoAir have announced charges for pre-booking 70 per cent of the seats on domestic flights. Both carriers levy an additional fee of Rs 200 for each window and aisle seat on domestic flights. For seats in the front row or next to the emergency exit, both with additional leg space, the charges stand at Rs 500 a passenger. Air India is also said to be changing its software to charge flyers for pre-booking seats.

"While airlines have been allowed to unbundle services, they cannot levy charges arbitrarily. Earlier, airlines levied a fee for pre-booking even middle seats on a flight; now, this has been discontinued. Some regulations have to be put in place," the official said.

Airlines feel regulatory control could impede an improvement in profitability and compromise the purpose of the policy allowing unbundled services. Budget carrier SpiceJet has decided to hold on to plans to increase ancillary earning, citing policy uncertainty at the ministerial level.

On April 29, the government had announced passengers could be made to pay separately for preferential seating, meals and drinks (except water), usage of airline lounges, carrying check-in baggage, sports equipment, musical instrument and luggage declared valuable. Civil Aviation Minister Ajit Singh had said allowing airlines to unbundle services would help them lower base fare for price-sensitive travellers and, at the same time, offer add-on services to more discerning customers, at a cost.

Subsequently, both Jet Airways and Air India reduced free check-in baggage allowance from 20 kg to 15 kg on domestic routes. For both these carriers, passengers travelling economy class have to pay Rs 250 per extra kg of check-in baggage.

GoAir, in the meantime, has made provisions for pre-purchasing excess baggage limits in increments of three, five and 10 kg. While a passenger would have to pay Rs 300 for carrying additional check-in baggage of up to three kg over and above the standard limit of 20 kg, charges for carrying extra baggage of five kg and 10 kg stand at Rs 900 and Rs 1,800, respectively, said sources in the travel industry.

According to the Centre for Asia Pacific Aviation, Indian airlines have the potential to earn ancillary revenues of $500 million (Rs 3,031 cr) a year, after services are unbundled.

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