NEW DELHI: Domestic airfares are set to rise as the Civil Aviation Ministry has lifted the temporary fare cap that was introduced in early December. The decision will take effect from Monday, March 23.
This move is aimed at offsetting the losses suffered by airlines due to the circuitous routes taken by international flights amid the ongoing conflict between the US, Israel, and Iran. Airlines had recently announced fare increases to offset the rising cost of Aviation Turbine Fuel caused by the crisis.
The order issued on March 20 stated, “The prevailing situation has since stabilised, with restoration of capacity and normalisation of operations across the sector.” It also instructed airlines not to impose “excessive or unjustified surges in fares during periods of peak demand or disruptions.”
It warned that fare caps or other interventions could be reintroduced in the public interest if necessary.
Following the IndiGo crisis from December 1 to 9, which resulted in massive cancellations and subsequent fare exploitation by airlines and travel platforms, the Ministry had invoked its regulatory powers on December 6, 2025, and fixed a fare cap. It had warned of strict action against violations and stated that the caps would remain in force until the situation stabilised.
At the time, the rate chart fixed the maximum permissible limits as follows: Rs 7,500 for distances up to 500 km; Rs 12,000 for 500–1,000 km; Rs 15,000 for 1,000–1,500 km; and Rs 18,000 for distances above 1,500 km.
The latest order also comes against the backdrop of the Federation of India Airlines—representing three major carriers—calling for a rollback of a recent Ministry directive mandating that airlines cannot charge for seat selection on 60% of seats. The body had warned that this cap could lead to a surge in airfares.