Airfare caps lifted from today; impact may be visible from April 1 amid rising fuel costs

The government has lifted the temporary cap on domestic airfares with effect from Monday, but the impact of the move may be visible from April 1 when aviation turbine fuel (ATF) prices are revised.

The Ministry of Civil Aviation, in an order issued on March 20, said the cap imposed in December following large-scale disruptions in IndiGo flights has been withdrawn from March 23 after the situation stabilised.

"... 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 Upon review, it has been decided that the fare cap imposed vide the aforesaid letter shall stand withdrawn with effect from 23rd March, 2026," the order said.

Union Civil Aviation Minister Ram Mohan Naidu said fare trends could see a clearer impact from next month.

“ATF prices are decided on the first of every month. So, the impact might be visible from April 1,” he said.

ATF accounts for 35–45% of airlines’ operating costs, and any increase in global crude oil prices, particularly amid geopolitical tensions in West Asia, directly impacts fares.

Even as the caps have been removed, the ministry asked airlines to maintain pricing discipline and ensure fares remain reasonable and transparent.

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

It also cautioned that any excessive or unjustified surge in fares, especially during peak demand or disruptions, will be viewed seriously.

The temporary caps were introduced on December 6 to curb an abnormal spike in ticket prices following widespread flight disruptions at IndiGo.

The lifting of caps comes at a time when airlines are facing operational disruptions on international routes due to the ongoing West Asia conflict, which has also driven up fuel prices.

Naidu said the government is in continuous consultation with airlines and multiple ministries to address the situation, particularly with regard to safe operations in the Middle East.

“It is a multi-departmental exercise… all the ministries have to sit together and address this,” he said.

Amid rising fuel costs, airlines have already moved to introduce fuel surcharges.

The Air India group has imposed a ₹399 surcharge on domestic routes and flights to SAARC countries, while increasing levies on international sectors, including Europe, North America and Australia.

IndiGo has introduced a fuel charge effective March 14, ranging from ₹425 on domestic routes to ₹2,300 for Europe-bound flights.

Akasa Air has also implemented a surcharge between ₹199 and ₹1,300 per sector depending on flight duration.