The Government of India has lifted domestic airfare caps from March 23 following disruptions involving IndiGo. Authorities have also warned airlines against unreasonable price hikes to balance market freedom with consumer protection.
The directive has been issued to the Directorate General of Civil Aviation (DGCA), which will monitor pricing patterns across the sector.
The government has decided to withdraw the temporary caps on domestic airfares, which signals a return to normalcy in flight operations. The Ministry of Civil Aviation said the decision follows stabilisation across the sector. The centre has also cautioned airlines against sharp fare spikes.
Centre had stepped in on December 6, 2025, after widespread disruptions triggered by IndiGo’s pilot-rostering crisis. It led to a sharp hike in ticket prices across India.
The caps were intended to prevent steep fare increases during a period of reduced capacity and provide affordable prices for passengers.
The distance-based caps on domestic economy airfares ranged from Rs 7,500 (under 500 km) to Rs 18,000 (over 1,500 km).
"Airlines shall ensure that fares remain reasonable, transparent and commensurate with market conditions, and that passenger interests are not adversely impacted," the recent directive mentioned.
It warned that any unjustified surge in airfares during peak travel periods or disruptions will be monitored seriously.
The directive added that it “reserves the right to take appropriate regulatory or administrative measures,” including reintroducing fare controls, if required in the public interest.
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The decision comes days after the Federation of Indian Airlines (FIA) had warned the Ministry that prolonged fare caps were pushing airlines towards financial stress due to rising operational costs.
FIA has also strongly opposed the MoCA directive mandating 60% free seat selection, citing it as regulatory overreach.
The removal also comes at a time when airlines are facing significant operational disruptions in international routes due to the West Asia conflict. Rising geopolitical tensions and higher oil prices could push aviation fuel costs upward, leading airlines to increase ticket prices.
For travellers, this may mean costlier bookings, reduced travel frequency, and a shift toward early planning or budget carriers as affordability becomes a growing concern.