Ticket Prices Likely To Soar As Centre Lifts Domestic Airfare Cap

Domestic airfares are set to be deregulated from Monday, with the government removing the temporary cap on ticket prices, opening the door for airlines to freely set fares amid rising operating costs.

The move comes months after the Centre had imposed a ceiling on domestic fares in December 2025 following widespread flight disruptions, particularly by IndiGo, which had triggered a sharp spike in ticket prices across the sector.

With the cap now lifted, airlines will no longer be bound by the earlier upper limit of approximately Rs 18,000 (based on distance) for a one-way economy ticket and can price tickets according to demand and market conditions.

In its order removing the limit, the Civil Aviation ministry said "excessive or unjustified surge in fares during periods of peak demand, disruptions, or exigencies, will be viewed seriously" and that fare caps or other interventions can be reintroduced "if required in public interest".

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The fare caps had been brought in as an emergency measure to protect passengers from sudden price surges after mass cancellations led to reduced capacity and inflated ticket prices.

The removal also comes against the backdrop of increasing aviation turbine fuel (ATF) prices and geopolitical tensions impacting flight operations, both of which have significantly raised airline expenses.

Officials said the decision aims to restore normal market dynamics in the aviation sector, allowing carriers greater pricing flexibility as the industry stabilises after the disruption-led volatility.

Airlines had been pushing for the removal, citing mounting financial pressure. Industry body Federation of Indian Airlines had flagged that continued fare restrictions were leading to revenue losses at a time when carriers are already grappling with rising fuel costs and operational challenges.