Worried about expensive flights? Government can now intervene in airfares

The government can temporarily direct airline tariffs during extraordinary situations from 2027. The rules retain market pricing while requiring clearer fare disclosures and DGCA monitoring.

In Short

• Centre can temporarily regulate airline fares from Jan 1, 2027
• No permanent cap on airfares; airlines set prices based on market
• Airlines must disclose base fare, taxes, fees and other charges separately

The government will have the power to temporarily intervene in airline ticket prices during extraordinary situations from January 1, 2027, under new aviation rules notified by the government. However, the rules do not introduce a permanent cap on airfares, and airlines will continue to decide ticket prices based on market conditions.

The government has notified the Bharatiya Vayuyan Niyam, 2026, which allows it to issue directions on airline tariffs in the public interest if an extraordinary situation arises.

Under Rule 192, the Centre can issue written directions to airlines to regulate tariffs. Any such intervention must be proportionate to the circumstances and will remain valid only for a specified period.

The rules, published in the Official Gazette on October 31, do not define what constitutes an extraordinary situation or set a specific threshold for government intervention.

This means passengers will not get a fixed upper limit on flight ticket prices. Instead, the government will have the option to step in temporarily if it considers intervention necessary in an exceptional situation.

NO PERMANENT CAP ON AIRFARES

India deregulated airline fare fixation in 1994, allowing airlines to determine ticket prices. Carriers generally use different pricing bands depending on factors such as demand, booking time and operating costs.

The new rules do not change this system or require airlines to seek prior government approval before setting individual fares.

Airlines will continue to determine their tariffs, taking into account factors including operating costs. The government, however, will have the power to issue temporary directions under Rule 192 in extraordinary circumstances.

The notification also does not provide a separate mechanism for routes served by only one airline or a formula to determine fares based on competition.

AIRLINES TO DISCLOSE FARES, TAXES AND OTHER CHARGES

The new rules also seek to make airline ticket pricing more transparent for passengers.

Airlines will have to separately disclose the base fare, taxes, fees, cancellation charges, refund conditions and other applicable charges.

Passengers must be shown the total amount payable both during the booking process and on their tickets.

The rules also distinguish between taxes payable to the government and fees collected by airlines for services or facilities provided to passengers.

This will allow travellers to see how much of their ticket price goes towards the basic fare, taxes and additional charges instead of viewing only the final amount.

DGCA TO MONITOR AIRLINE TARIFFS

The new rules also provide for monitoring of airline tariffs by the Directorate General of Civil Aviation (DGCA).

Air transport operators covered by the tariff-filing requirement will have to submit their established fares to the DGCA in the format and at intervals specified by the regulator. Airlines will also have to publish these tariffs on their websites and other digital platforms.

The notification retains tariff monitoring but does not reproduce the specific grounds for intervention mentioned in the existing Aircraft Rules, 1937.

Under Rule 135(4) of the earlier rules, the DGCA could issue directions in cases involving excessive or predatory tariffs or oligopolistic practices. The new Rule 192 does not list these grounds in the same way.

RULES FOLLOW SUPREME COURT PROCEEDINGS ON AIRFARES

The notification comes after proceedings in the Supreme Court over 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 directed the Centre to place the notified rules before it by November 16.

The Bharatiya Vayuyan Niyam, 2026, have been notified under the Bharatiya Vayuyan Adhiniyam, 2024, which replaced the Aircraft Act, 1934. They will replace the Aircraft Rules, 1937, from January 1, 2027, subject to the notification's savings provisions.

For passengers, the key change is that the government will have a temporary intervention mechanism in extraordinary situations, while airlines will face clearer requirements on fare disclosures. The rules do not guarantee cheaper tickets or prevent fares from rising during periods of high demand.

- Ends