Airfares are set to inch higher after the government decided to withdraw the temporary fare cap imposed in December following widespread disruptions at IndiGo, restoring pricing flexibility to airlines grappling with rising costs.
The Ministry of Civil Aviation said the cap—introduced to curb a sharp spike in ticket prices during a period of constrained capacity—will be withdrawn with effect from March 23, citing normalisation in operations and restoration of capacity across the sector.
“The prevailing situation has since stabilised… upon review, it has been decided that the fare cap… shall stand withdrawn,” the Ministry said in a statement.
Cap removal follows airline pressure
The rollback comes little over a week after airlines, through their lobby grouping, warned the government of possible route withdrawals and delays in fleet and network expansion if pricing curbs continued.
Carriers have argued that fare caps were distorting yields at a time when operating costs are rising sharply, particularly due to elevated aviation turbine fuel (ATF) prices and longer flight durations caused by airspace closures in parts of the region, including over Pakistan.
Background: Crisis-driven price control
The government had imposed fare ceilings in early December after mass cancellations by IndiGo triggered an unprecedented surge in ticket prices, with fares on key routes soaring to as high as Rs 40,000–Rs 70,000.
Under the cap, airlines could charge a maximum of Rs 18,000 for a one-way ticket on longer routes, with lower bands starting at Rs 7,500 for flights up to 500 km.
The measure was aimed at preventing “opportunistic pricing” and safeguarding passenger interests during a period of disruption-led capacity shortages.
Costs remain elevated
Even as operations have stabilised, airlines continue to face margin pressures. ATF prices have climbed to recent highs, while geopolitical tensions have forced rerouting of flights, increasing fuel burn and operating time.
The removal of fare caps is expected to provide airlines with room to recalibrate fares in line with these cost pressures, particularly during peak travel periods.
Govt warns against profiteering
Even as it freed up pricing, the Ministry of Civil Aviation cautioned airlines against excessive fare hikes.
“Airlines are required to exercise pricing discipline and act responsibly… fares must remain reasonable, transparent and commensurate with market conditions,” the Ministry said.
It added that any unjustified surge in fares, especially during disruptions or peak demand, will be “viewed seriously,” with the government reserving the right to reintroduce fare controls if necessary in public interest.
New passenger-friendly rules kick in
In parallel, the Directorate General of Civil Aviation has introduced a set of passenger-centric directives. These include mandating that at least 60 percent of seats on every flight be offered free of charge (without seat selection fees), ensuring passengers on the same booking (PNR) are seated together, and requiring clearer, more transparent policies for carriage of pets, sports equipment, and musical instruments.
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