New rules empower government to impose temporary fare controls, but stop short of introducing a permanent cap on airfares.
The Indian government will be able to temporarily intervene in airline ticket prices from January 1, 2027, under new aviation rules. The move comes amid concerns about high airfares as crude oil and aviation turbine fuel (ATF) prices remain elevated.
However, the rules do not introduce a permanent cap on ticket prices. Airlines will continue to set fares based on operating costs, passenger demand and market conditions, The Economic Times reported.
When can the government intervene?
Under Rule 192 of the Bharatiya Vayuyan Niyam, 2026, the Centre can issue written directions to airlines to regulate fares when an extraordinary situation arises and intervention is considered necessary in the public interest.
Any intervention must be proportionate to the circumstances and remain in force for a specified period, India Today reported. The rules, notified in the Official Gazette on October 31, do not define what qualifies as an extraordinary situation.
No permanent cap on airfares
India deregulated airline fare-setting in 1994, allowing carriers to determine ticket prices according to market conditions. Under the new rules, airlines will not need prior government approval to set individual fares.
The Centre will retain the authority to intervene temporarily, but the framework does not guarantee lower ticket prices or establish a fixed upper limit on airfares.
Airlines must disclose ticket charges
The rules also require airlines to display the total amount payable during the booking process and on tickets, along with a separate breakdown of:
- Base fare and government taxes
- Airline fees and other applicable charges
- Cancellation fees and refund conditions
The Directorate General of Civil Aviation (DGCA) will monitor airline tariffs. Carriers will be required to submit fare details to the regulator and publish them on their websites and other digital platforms.
Rules follow Supreme Court proceedings
The notification follows Supreme Court proceedings concerning allegations of arbitrary and excessive airfares.
On October 16, Solicitor General Tushar Mehta told the court that the new rules had received administrative approval and would be published within two weeks. The court subsequently asked the Centre to submit the notified rules by November 16.
What this means for passengers
From January 1, 2027, the government will have the authority to step in and regulate airfares during extraordinary circumstances. In normal conditions, airlines will continue to determine ticket prices.
Passengers will also be able to see a clearer breakdown of base fares, taxes and additional charges when booking flights.
