India Removes Cap On Domestic Airfares From March 23; Flight Prices Expected To Jump Again

New Delhi: The government of India has announced its decision to remove cap on domestic flight prices from March 23. With this decision, the Ministry of Civil Aviation (MoCA) has ended the pricing control system that was temporarily imposed during the IndiGo crisis in December, 2025.

Air passengers are now expected to face a fresh wave of high airfares due to the removal of the cap.

‘Situation Has Stabilised’: Govt

Ensuring that passengers' interests will not be adversely impacted, the Ministry of Civil Aviation noted that the situation during the IndiGo crisis has stabilised.

The ministry's order read, “The prevailing situation has since stabilised, with restoration of capacity and normalisation of operations across the sector. Upon review, it has been decided that the fare cap imposed vide the aforesaid letter shall stand withdrawn with effect from 23rd March, 2026.”

The ministry added, “Airlines shall ensure that fares remain reasonable, transparent and commensurate with market conditions, and that passenger interests are not adversely impacted.”

Under the IndiGo crisis framework imposed in December, fares were capped by the government at ₹7,500 (≤500 km), ₹12,000 (500–1000 km), ₹15,000 (1000–1500 km), and ₹18,000 (>1500 km), providing a ceiling against extreme surge pricing. Prior to the caps, passengers frequently faced volatile and often elevated fares, especially on high-demand routes and last-minute bookings.

Airlines' Petition To MoCA

The removal in cap prices comes after the airlines requested the same amidst reported losses and higher operational costs. This comes as fuel prices have jumped amid the ongoing war in the Middle East.

The Federation of Indian Airlines (FIA), representing the country’s leading carriers, including Air India, IndiGo, and SpiceJet, had issued an urgent petition to the Ministry of Civil Aviation (MoCA) seeking the immediate removal of domestic airfare caps.

The FIA had stated that the industry was facing a financially stressful environment. The federation argued that the original crisis conditions of December 2025, which initially prompted the government to impose price controls, have now stabilised.