Flight ticket prices: The Directorate General of Civil Aviation (
DGCA
) has introduced a new directive that could impact
flight ticket prices
, making them more affordable for some passengers while potentially increasing costs for others.
What is changing?
Airlines include charges for certain services in their ticket prices. However, based on feedback, these services are often not needed by many passengers.
By removing these extra charges and letting travelers choose the services they want, the base fare for flight tickets could become cheaper. The DGCA’s circular from April 23, 2024, states that these extra services should be optional—passengers should be able to opt-in to them instead of having to opt-out.
According to ET, with the
opt-in process
, you choose which extra services you want when booking your flight. In the opt-out process, all extra services are included by default unless you specifically decline them.
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Here’s a list of services that airlines can now offer on an opt-in basis:
According to the circular, the DGCA listed seven services that, if separated from the ticket cost, could lower the base fare. These services are:
– Preferential seating
– Meal/snack/drink charges (except drinking water)
– Charges for airline lounges
– Check-in baggage fees
– Sports equipment charges
– Musical instrument carriage
– Fees for declaring valuable baggage with higher liability limits
Airlines can offer both free baggage allowance and “Zero baggage/no-check-in baggage” fares as part of their policy. However, if a passenger chooses the no-check-in baggage option and then brings baggage to check-in at the airport, there will be additional charges. These charges must be reasonable, clearly shown to the passenger when booking the ticket, and also printed on the ticket itself.
Nilesh Tribhuvann, Managing Partner at White & Brief – Advocates & Solicitors stated that the aviation industry may see a small change in pricing structures. This doesn’t mean that ticket prices will drop significantly everywhere, but customers now have more flexibility to choose travel options that fit their budget and preferences, which could lower their overall travel expenses.
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Potential increase in airfare
Another DGCA circular states that airlines must ensure children under 12 years of age are to be seated with at least one of their parents or guardians when traveling on the same reservation (PNR). Airlines must keep a record of this arrangement.
Gauri Subramanium, an Advocate at the Supreme Court of India, explains that
revenue management
plays a crucial role in the aviation industry. Because of this, airlines now have a unique opportunity to adjust ticket pricing strategies while complying with the new regulations.
Subramanium notes that airlines have become skilled at adding fee-based services over the past few years. Things that used to be free, like check-in baggage and seat selection, now often come with extra charges. This shift has given airlines a unique chance to either include the cost of seat selection in the base ticket price or use forecasting methods to manage pricing while still meeting the seating requirements for parents and children. However, when ticket prices are similar across segments, it’s harder to predict demand for each category.
Tribhuvann points out that this circular requires airlines to make operational adjustments. As a result, airlines need to find ways to balance the new rules with creative revenue management strategies.
He explains that although some might say this directive could slightly reduce revenue from seat selection fees, it follows a customer-focused approach, which is crucial for building a strong brand reputation. The aviation industry now needs to find innovative ways to manage revenue to stay profitable while also meeting the regulatory requirements.
Subramanium explains that the requirement to reserve a seat for a child next to a parent might lead airlines to limit the number of web-check-in seats available for other passengers. It could also encourage airlines to raise the price of a child’s ticket by including the cost of seat selection at the time of purchase.
