India Removes Caps On Domestic Airfares As Carriers Face Higher Costs From Middle East War Disruptions

• India has lifted temporary fare caps on domestic flights, giving airlines pricing freedom as the aviation sector stabilizes while urging responsible fare practices.
• Ministry said the caps, which were introduced on December 6, 2025, were aimed at containing abnormal surges in ticket prices following large-scale flight disruptions by India's largest carrier IndiGo, while also safeguarding passenger interests and ensuring affordability during a period of constrained capacity.
• With operations now normalized and capacity restored, the government has decided to withdraw the fare caps with effect from March 23, 2026.

The Indian Ministry of Civil Aviation has withdrawn temporary caps on domestic airfares, effective from Monday, three months after imposing emergency price controls during the country's worst aviation disruption in recent times.

The temporary caps on domestic airfares were imposed on 6 December 2025 to contain an abnormal surge in ticket prices arising out of large-scale flight disruptions of IndiGo, India's largest carrier with over 60 per cent market share.

The decision marks the end of a price-control measure that the government initiated and the move comes after the government reviewed the restoration of airline capacity and the normalization of operations following disruptions linked to the IndiGo crisis.

• Following the IndiGo crisis from December 1 to 9, which resulted in massive cancellations and subsequent fare exploitation by airlines and travel platforms, the Ministry had invoked its regulatory powers on December 6, 2025, and fixed a fare cap.
• It had warned of strict action against violations and stated that the caps would remain in force until the situation stabilized.
• The rate chart was fixed the maximum permissible limits as follows: Rs 7,500 for distances up to 500 km; Rs 12,000 for 500–1,000 km; Rs 15,000 for 1,000–1,500 km; and Rs 18,000 for distances above 1,500 km.

The low cost carrier IndiGo had canceled thousands of flights due to a pilot rostering crisis owing to implementation of revised Flight Duty Time Limitations rules, that led to a sharp spike in ticket prices on key routes and prompting government intervention.

The revised Flight Duty Time Limitations (FDTL) rules, implemented in India through late 2025 by the DGCA, mandate increased pilot rest to mitigate fatigue. Key changes include 48 hours of weekly rest, a 10-hour daily minimum rest, and strict night duty restrictions (10-hour cap, max 2 night landings). These rules aim to enhance safety but require increased airline staffing.

Sources say, this move is aimed at offsetting the losses suffered by airlines due to the circuitous routes taken by international flights amid the ongoing conflict between the US, Israel, and Iran. Airlines had recently announced fare increases to offset the rising cost of Aviation Turbine Fuel caused by the crisis.

The order issued on March 20 stated,

“The prevailing situation has since stabilised, with restoration of capacity and normalisation of operations across the sector.” It also instructed airlines not to impose “excessive or unjustified surges in fares during periods of peak demand or disruptions.”

However, the order warned that fare caps or other interventions could be reintroduced in the public interest if necessary.

The latest order also comes against the backdrop of the Federation of India Airlines—representing three major carriers—calling for a rollback of a recent Ministry directive mandating that airlines cannot charge for seat selection on 60% of seats. The body had warned that this cap could lead to a surge in airfares.