More than three months after imposing temporary caps on domestic airfares, the government has decided to lift the curb. The government had imposed these caps in the wake of the IndiGo flight disruptions in December last year. According to an order issued by the Ministry of Civil Aviation, the removal of airfare caps will be effective from March 23, 2026. The development is significant as it comes at a time when airlines are facing significant operational disruptions on international routes due to the West Asia conflict. In the order, the ministry also said that airlines are required to exercise pricing discipline and act responsibly.
“Airlines shall ensure that fares remain reasonable, transparent and commensurate with market conditions, and that passenger interests are not adversely impacted,” it said.
What does it mean for flyers and airlines?
The move is expected to directly impact flyers, and airfares are set to be costlier with the removal of this airfare cap. Airlines, grappling with rising costs, can now adjust fares freely based on demand and supply. This means that prices of flights during holidays, festivals, and for last-minute bookings can see a considerable surge.
However, it is important to note that this could also lead to reduced fares during off-peak periods.
How will it help airlines?
The move will now give airlines the freedom to utilise dynamic pricing to maximise their revenue. This will also help them recover lost revenues during disruptive times.
Ministry is monitoring the airfare trends
However, the ministry has clearly stated it is monitoring the airfare trends on a real-time basis and that airlines are required to exercise pricing discipline and act responsibly. It also stressed that any instance of excessive or unjustified surge in fares, if observed particularly during periods of peak demand, disruptions, or exigencies, would be viewed seriously.
“Airlines shall ensure that fares remain reasonable, transparent and commensurate with market conditions, and that passenger interests are not adversely impacted,” it said.
What were the caps?
| Flight Distance | Maximum One-Way Fare Cap |
| Up to 500 km | Rs 7,500 |
| 500 – 1,000 km | Rs 12,000 |
| 1,000 – 1,500 km | Rs 15,000 |
| Above 1,500 km | Rs 18,000 |
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