Why does charging of seats matter for airlines? Is it even legal? Explained | Latest News India

Ultra-low-cost carrier Ryanair is known for snarky replies on social media site X (formerly Twitter). When a passenger recently posted about paying for a window seat which was without a window, the airline’s social media team replied with a screenshot of the seat booking which called out that the seat has no window.

The roots of these charges lie in the Air Transport Circular (ATC) 01 of 2021, which talked about unbundling of services. (File)
The roots of these charges lie in the Air Transport Circular (ATC) 01 of 2021, which talked about unbundling of services. (File)

In India, passengers’ complaints have increased regarding seat selection fees with calls for intervention from the government. News reports have indicated that the Secretary of Consumer Affairs has warned airlines about all seats being paid.

The roots of these charges lie in the Air Transport Circular (ATC) 01 of 2021, which talked about unbundling of services. The circular mentioned that the airline provides services which may not be necessary for every traveller and hence there remains potential to reduce the basic airfare by unbundling of services. This includes preferential seating, food and drinks (except water), and baggage charges amongst others.

Is it legal?

The origins of unbundling go back to the start of AirAsia India when the airline charged for baggage and water — in line with its global practice. The immediate hue and cry that followed led to the regulator making guidelines around unbundling which evolved over time.

The latest ATC allows charging for “preferential” seats but in reality, almost all seats have become preferential and that is where the angst amongst passengers lies. To be fair to the airlines, if booked early – there are a handful of seats which are available for free selection. Most airlines also allow auto selection of seats at web check-in without a charge and all airlines help with change of seat assignment at the airport counter. Yet, the complaints continue since there are families travelling together, which are often separated.

Is it ethical and moral?

None of the circulars talk about the cap on how many seats can be offered for a fee. This means even the middle seats, typically not the preferred ones, are also charged.

Auto seat selection without fee is a standard practice worldwide and Indian carriers are not the only ones facing flak. Globally, few have started to commit that they would ensure families/passengers on the same PNR sit together. However, with the seat map open for selection for passengers willing to pay – there may not be enough seats to assign in the end when passengers sitting without paying the fee will be allocated seats.

From an airline perspective, as long as it is legal — in a tough environment, the ethical and moral part comes in later. With profits as thin as a boarding pass, ancillary revenue is what helps shore up its revenue and any revenue is good revenue.

Tail Note

Over the last few years, transparency has taken a back seat and all efforts by the regulator to streamline have not had the best of results. A cumbersome but mandated procedure is for airlines to upload fare details on their website. However, they are hardly of any use. On the other hand, airlines charge a convenience fee — just for booking the ticket, without any real “convenience” being thrown in, as this is a very standard procedure.

Instead of unbundling, will it make sense to quote the final price and show it to the consumer — who is otherwise bombarded by offers from various online travel agencies, which largely converge towards a similar fare?

The regulator has to maintain a fine balance between the demands and needs of passengers and the financial position of airlines. The balance could well be a minimum number of seats being offered for free or a certain percentage of seats per flight being offered for free. The challenge? They could well be picked up early by the passengers as is the case currently and passengers could still complain that they have got a raw deal.

From a passenger perspective, it is simpler to opt for combos (bundling) which allows seat selection as part of the final pricing which will ensure preferential seats, more so if it involves travel of more than one passenger as a group or family, but then it comes at a cost and that is where the angst of the passenger lies.

Ameya Joshi is an aviation analyst.

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