The Indian government has withdrawn the temporary cap on domestic airfares imposed in the aftermath of the December 2025 flight disruption crisis involving IndiGo, marking a return to market-driven pricing at a time when jet fuel prices are increasing due to the West Asia war. Govt lifts curbs on ticket prices, flags action if fares spike again (ANI)
Operations in terms of staffing, a key issue in December, have also stabilised across the aviation sector.
It was learnt on Saturday that, in an order dated March 20, the Ministry of Civil Aviation said the fare cap, introduced on December 6, 2025, was aimed at containing an “abnormal surge” in ticket prices and safeguarding passenger interests during a period of constrained capacity.
The ministry added that the situation has since “stabilised”, with restoration of capacity and normalisation of operations across the sector. Following a review, it said, the fare cap will stand withdrawn with effect from March 23, 2026.
The caps were introduced when widespread disruptions caused by mass cancellations of IndiGo flights triggered a sharp spike in ticket prices. At the time, authorities fixed upper limits on fares based on distance, with the ceiling going up to ₹18,000 for a one-way journey.
Airlines' push for fare cap removal Recently, as the West Asia war triggered a spike in jet fuel prices, a grouping of carriers representing IndiGo, Air India and SpiceJet had warned the Centre that they may be forced to withdraw routes and delay fleet and network expansion plans if the curbs were not lifted, Reuters reported.
While the operational crisis has since eased, airlines argued that the restrictions, continued without a clear timeline, were hurting revenues.
According to HSBC analysts cited by Reuters, even a $1 per barrel increase in fuel prices could raise IndiGo’s annual fuel bill by around ₹3 billion.
At the same time, both IndiGo and Air India, which together account for over 90% of India’s domestic aviation market, have been forced to operate longer routes to destinations in Europe and North America due to airspace restrictions, further increasing fuel burn and operational costs.
Earlier this month, several carriers, including Air India, IndiGo and Akasa Air, have also rolled out fuel surcharges on both domestic and international routes as aviation turbine fuel (ATF) prices continue to rise amid the ongoing conflict.
Airlines asked to maintain pricing discipline Even as the caps are removed, the government said that airlines must continue to exercise pricing discipline. It said carriers are required to ensure fares remain “reasonable, transparent and commensurate with market conditions”, without adversely impacting passenger interests.
The ministry has cautioned that any instance of “excessive or unjustified” surge in fares, especially during peak demand, disruptions or exigencies, will be viewed seriously.
It added that airfare trends will continue to be monitored closely on a real-time basis.