INDUSTRY
Air travel to get costlier as government scraps fare cap imposed post-Indigo crisis
- IBJ Bureau
- Mar 22, 2026
Domestic air fares are set to rise from next week, as the government lifts the fare cap imposed during last year’s aviation disruption. This allows airlines to pass on higher operating costs to passengers.
The Ministry of Civil Aviation has decided to withdraw the Rs 18,000 cap on domestic ticket prices (excluding user development fees, security charges and taxes) from Monday, March 23.
The cap had been introduced on December 6, 2025, following widespread flight disruptions by IndiGo.
Route-wise fare ceilings were put in place to shield passengers from excessive pricing during the crisis.
With flight operations now stabilised, the ministry has said that the rationale for fare regulation no longer exists, and market-driven pricing will resume.
However, airlines have not been given a completely free hand. The government has directed carriers to ensure that fares remain fair, transparent and aligned with prevailing market conditions.
Authorities have also cautioned airlines against exploiting peak demand periods or emergencies to impose unjustified fare hikes.
“If required, steps such as fare regulation may be taken again in public interest,” the ministry has said, adding that air fares will continue to be closely monitored.
The decision to scrap the cap follows representations from the Federation of Indian Airlines, which includes major carriers such as Air India and SpiceJet.
In a letter dated March 12, the body had warned that prolonged fare caps were pushing airlines towards financial stress due to mounting operational costs amid the war in the Persian Gulf region.
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