The Ministry of Civil Aviation on Saturday (March 21) has withdrawn the temporary cap on domestic airfares, with the order coming into effect from March 23, signalling a return to market-driven pricing after months of regulatory intervention.The fare caps, imposed in early December 2025, were introduced at the height of the IndiGo disruption when widespread flight cancellations triggered an unprecedented surge in ticket prices across routes.
At the time, the government stepped in to curb what it termed “unreasonable pricing”, fixing upper limits on economy-class fares based on distance. These caps ranged from ₹7,500 for routes up to 500 km to a maximum of ₹18,000 for flights above 1,500 km, excluding taxes and airport charges.
Also Read: Airlines to allocate at least 60% seats for free, says Aviation MinistryThe move came after fares on key routes had spiked sharply amid supply disruptions caused by thousands of flight cancellations by IndiGo, India’s largest airline.
According to government officials, the temporary intervention helped stabilise fares and protect passengers during a period of acute operational stress in the aviation sector.However, with flight schedules normalising and airline operations largely stabilised, the ministry has now decided to roll back the price controls. From March 23, airlines will be free to set fares based on demand and supply dynamics.The decision is also expected to provide relief to carriers, which have been grappling with rising operating costs, particularly due to elevated aviation turbine fuel (ATF) prices and longer international flight routes amid geopolitical tensions.Also Read: Jet fuel may hit 80% of airline costs; April 1st is the date Indian aviation is dreadingEven as caps are lifted, the government has made it clear that airlines will be under close watch. The Directorate General of Civil Aviation (DGCA) will continue to monitor fares to ensure there is no excessive or unjustified surge pricing, with authorities retaining the option to step in again if required.The rollback marks a shift from crisis-driven regulation to a more normalised operating environment, but also raises the possibility of higher ticket prices in the near term as airlines regain pricing flexibility.
