Domestic airfare caps to be lifted from March 23, says government

The Ministry of Civil Aviation is ending the temporary price caps on domestic airfares from March 23. This allows airlines to set fares based on market demand, but the government has warned them to maintain reasonable and transparent pricing.

The Ministry of Civil Aviation has decided to withdraw the temporary fare caps on domestic airfares starting Monday (March 23). The decision marks the end of a price-control regime that the government initiated several months ago to manage volatility in the aviation market.

The Ministry confirmed the development through an official order, noting that the restrictions on ticket pricing are no longer required under the current operating environment.

Background of Fare Cap Implementation

"Whereas, vide letter dated 6th December 2025, Ministry had introduced a temporary fare cap on domestic airfares with a view to contain abnormal surge in ticket prices arising out of large-scale flight disruptions of IndiGo, and with an objective to safeguard passenger interests and ensuring affordability during a period of constrained capacity," the Ministry of Civil Aviation stated.

Reason for Withdrawal and Market Stabilisation

In the official communication, the Ministry observed that the "prevailing situation has since stabilised, with restoration of capacity and normalisation of operations across the sector." Based on this assessment, the government determined that the fare cap imposed in December "shall stand withdrawn with effect from 23rd March, 2026."

This move allows airlines to once again determine ticket prices based on market demand and supply dynamics.

Directives to Airlines and Future Oversight

Despite the deregulation, the Ministry issued a clear directive to carriers regarding their pricing strategies. "While withdrawing the fare cap, it is reiterated that airlines are required to exercise pricing discipline and act responsibly. Airlines shall ensure that fares remain reasonable, transparent and commensurate with market conditions, and that passenger interests are not adversely impacted," it said.

Warning Against Excessive Fare Hikes

The Ministry warned that any instance of "excessive or unjustified surge in fares" will be "viewed seriously," particularly during periods of peak "demand, further disruptions, or other exigencies."

"The Ministry will continue to closely monitor airfare trends on a real-time basis," it stated.

Ministry Reserves Right to Intervene

The Ministry "reserves the right to take appropriate regulatory or administrative measures," which could include the "re-introduction of fare controls or other interventions" if such steps are deemed necessary in the "public interest." (ANI)

(Except for the headline, this story has not been edited by Asianet Newsable English staff and is published from a syndicated feed.)