Airfares on high-demand metro routes and for short-notice bookings have gone up by at least 5-10% as the government removed price caps, according to estimates by travel agents and analysts.
Prices are expected to rise further from Monday when the cap revocation, announced on Saturday, comes into effect. The government imposed the distance-based fare ceilings on December 6, 2025, after IndiGo’s mass cancellations triggered capacity shortages and jacked up ticket prices.
Early Data on Fare Hikes
“Tickets on high-demand metro routes, short-notice bookings, and for dates that were already priced close to the ceiling have already started seeing a 5-10% rise in prices for the last week of March and early April compared to last week (March 16-22),” a senior executive from Yatra.com told FE.
He added that ticket prices on routes such as Delhi-Jaipur, Delhi-Chandigarh, Delhi-Bhopal, Delhi-Jammu, and Delhi-Mumbai have increased by 8%, 6%, 10%, 10%, and 6%, respectively, for the last week of March and early April when compared to last week, initial data showed. Similarly, flights on Mumbai-Goa, Mumbai-Pune, Mumbai-Ahmedabad, and Mumbai-Chennai routes have seen rise of 8%, 5%, 7% and 8%, respectively, in ticket prices.
“Average last-minute ticket (for a ticket booked 36 hours before the flight) prices for Delhi-Mumbai, Delhi-Kolkata flights, which were capped at Rs 15,000 have risen from Rs 5,500-6,000 last week (March 16-22) to Rs 6,000-6,500 in the coming week (March 23-39),” Lokesh Sharma, a senior aviation and defence analyst told FE.
He added that the real impact of the removal of domestic airfare caps will be visible after April 15, when schools in the country start announcing their summer breaks and flight bookings rise.
Similarly, travel analysis firm The Adept Traveler flagged that domestic feeder legs into Delhi, Mumbai, and Bengaluru — used to connect to long-haul flights — are seeing a rise in domestic ticket prices since the government’s announcement on the removal of fare caps.
Triple Threat
The transition to unregulated pricing occurs as Indian carriers face a financial environment marked by the ongoing conflict in West Asia, which has driven aviation turbine fuel (ATF) prices higher. Since early March 2026, ATF has seen significant price escalation due to supply interruptions, particularly the halt of vessel movement through the Strait of Hormuz. Fuel costs currently represent 30-40% of an airline’s operating expenses. Additionally, the rupee has reached record lows against the US dollar, increasing dollar-denominated costs such as aircraft lease payments and engine maintenance.
Airlines argued that the cap was no longer sustainable given their cost structure, with the Federation of Indian Airlines, representing IndiGo, Air India, and SpiceJet, last week warning the government that keeping the caps while fuel and routing costs rise was eroding revenue and could force route withdrawals or delayed expansion.
In a letter to the Ministry of Civil Aviation (MoCA), the group cautioned that if current conditions persisted, carriers risked “severe financial losses” that could push weaker operators towards financial distress.
The ministry, in its December 6 order, capped economy fares at Rs 7,500 for sectors up to 500 km; Rs 12,000 for 500-1,000 km; Rs 15,000 for 1,000-1,500 km; and Rs 18,000 for routes beyond 1,500 km, excluding taxes and fees.
The ministry has now said operations have stabilised and the cap “shall stand withdrawn with effect from 23rd March, 2026,” while warning airlines to keep fares “reasonable, transparent and commensurate with market conditions.”