Domestic airfares are set to rise from next week as the government lifts the fare cap imposed during last year’s aviation disruption, allowing airlines to pass on higher operating costs to passengers.

The Ministry of Civil Aviation has decided to withdraw the ₹18,000 cap on domestic ticket prices (excluding user development fees, security charges and taxes) from Monday, March 23. The cap had been introduced on December 6, 2025, following widespread flight disruptions by IndiGo. Route-wise fare ceilings were put in place to shield passengers from excessive pricing during the crisis.

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With flight operations now stabilised, the ministry said the rationale for fare regulation no longer exists and market-driven pricing will resume. However, airlines have not been given a completely free hand. The government has directed carriers to ensure fares remain fair, transparent and aligned with prevailing market conditions.

Authorities have also cautioned airlines against exploiting peak demand periods or emergencies to impose unjustified fare hikes. “If required, steps such as fare regulation may be taken again in public interest,” the ministry said, adding that airfares will continue to be closely monitored.

The decision follows representations from the Federation of Indian Airlines, which includes major carriers such as Air India and SpiceJet. In a letter dated March 12, the body warned that prolonged fare caps were pushing airlines towards financial stress due to mounting operational costs.

Carriers highlighted a sharp rise in aviation turbine fuel prices, partly linked to geopolitical tensions involving Iran, as a key factor impacting profitability. According to the federation, continued price controls could lead to significant revenue losses and threaten the viability of several operators.

In a separate communication, the industry body also urged the government to withdraw a rule mandating that at least 60% of seats be offered without additional charges for seat selection, arguing that such measures could inadvertently push up base fares.