Free seat mandate may not lower fares as airlines may rework pricing on peak routes

The Indian government’s move to make seat selection largely free may offer relief in form, but not necessarily in cost, with airlines expected to recalibrate base fares on high-demand routes to offset the loss of ancillary revenue.

The Ministry of Civil Aviation recently directed carriers to make at least 60% of seats available for selection at no additional charge, following concerns over rising add-on fees.

While the measure targets passenger grievances around paid seating, industry executives say it is unlikely to materially reduce overall ticket prices.

Airlines in India operate on dynamic pricing models, with fares driven by demand, seasonality and route-level competition. Over the past few years, ancillary streams such as seat selection have become an important contributor to margins, particularly for low-cost carriers. With that lever partially curtailed, pricing adjustments elsewhere appear inevitable.

“Airlines don’t price components in isolation, they price the total product,” said a senior aviation analyst. “If one revenue stream is restricted, recovery typically happens through base fares, especially on routes where demand visibility is strong.”

The adjustment is expected to be most visible on peak sectors, including metro-to-metro routes and high-traffic leisure corridors, where load factors remain consistently high. Airlines may also trim promotional inventory, resulting in fewer ultra-low fares in the market.

This comes even as carriers have already moved to raise ticket costs through higher fuel surcharges amid elevated aviation turbine fuel prices, underlining their limited ability to absorb cost pressures.

India’s deregulated fare regime gives airlines flexibility to reprice tickets, although any sharp increase could draw scrutiny from the Supreme Court of India, which is currently examining fare volatility and ancillary charges.