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The carrier on Monday announced reducing operations due to non-availability of crew and other operational reasons.
Initially, the flights would connect Goa with Lakshadweep and plans are on the anvil to launch flight services between Bengaluru and Lakshadweep.
DGCA issued a show cause notice to the carrier, which submitted its response to the watchdog on February 20.
The airline responded that the charges are only towards preferred seat selection and passengers can choose any of the free seats online, subject to availability or opt for auto-seat assignment, which is also free.
A cabin crew member of the flight had filed a complaint with the Directorate General of Civil Aviation (DGCA) about the pilot allowing a female friend into the cockpit. The incident happened on February 27.
The incident happened on a Dubai-Delhi flight on February 27.
The airline has reported the incident to the Air Traffic Control (ATC) at the IGI airport.
On January 20 and 24, the watchdog penalised Air India for reporting lapses related to incidents of unruly passenger behaviour onboard two international flights last year.
Domestic passengers to get 75% of ticket cost says the revised DGCA norms.
This is the second time in less than a week that the watchdog has taken enforcement action against the airline in connection with unruly passenger behaviour.