India To Remove Cap On Domestic Airfares From March 23

Last Updated:March 21, 2026, 22:46 IST

Airlines have been directed to maintain discipline in fare-setting, keeping prices fair, transparent and in line with market conditions.

The Indian government will remove the temporary cap on domestic airfares from March 23, the Ministry of Civil Aviation announced, ending a pricing control that had been in place since December 2025. The fare cap was introduced after large-scale flight disruptions by IndiGo triggered a sharp spike in ticket prices, leaving passengers with limited options and steeply elevated fares. The government had imposed route-wise upper limits on ticket prices to protect travellers during the period of reduced capacity.

With flight operations now restored to normal levels, the ministry said the rationale for the cap no longer applies and market-based pricing will resume. However, the government stopped short of giving airlines a completely free hand. Airlines have been directed to maintain discipline in fare-setting, keeping prices fair, transparent and in line with market conditions. The ministry warned that any excessive or unjustified fare increases during peak demand periods or emergencies would be treated seriously and that the government would continue to monitor airfares closely.

The ministry also made clear that fare controls could be reimposed if circumstances warranted it.

“If required, steps such as fare regulation may be taken again in public interest," the ministry said.

The decision comes after the Federation of Indian Airlines, which represents IndiGo, Air India and SpiceJet, had written to the government on March 12 warning that the continued fare caps were pushing carriers toward financial distress. Indian airlines are incurring “huge" revenue losses and facing higher operational costs, the letter said, compounded by a sharp rise in jet fuel prices triggered by the Iran war.

“If the current situation continues, airlines will face severe financial losses, pushing several operators closer to unsustainable financial conditions and potentially threatening their continued viability," the federation warned in the private letter, Reuters reported.

In a separate letter sent, the federation also urged the government to withdraw a directive requiring that a minimum 60 percent of seats on any flight be made available without additional charges for seat selection, warning that the rule could itself lead to higher base fares.

News india India To Remove Cap On Domestic Airfares From March 23

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