Inflation, capacity and crisis: How the govt fixed the Rs 7,500–18,000 fare caps
According to the Ministry of Civil Aviation (MoCA), one-way fares on routes up to 500 km cannot exceed Rs 7,500, while sectors between 1,000 and 1,500 km, such as Delhi-Mumbai, are capped at Rs 15,000. For flights longer than 1,500 km, the maximum has been set at Rs 18,000.
- Dec 6, 2025,
- Updated Dec 6, 2025 6:52 PM IST
India’s decision to impose emergency caps on domestic airfares this week comes amid one of the country’s worst aviation disruptions, with IndiGo cancelling thousands of flights due to a pilot-rostering crisis. The sudden capacity crunch pushed ticket prices to unprecedented levels on busy routes, forcing the government to intervene with regulated ceilings ranging from Rs 7,500 to Rs 18,000.
According to the Ministry of Civil Aviation (MoCA), one-way fares on routes up to 500 km cannot exceed Rs 7,500, while sectors between 1,000 and 1,500 km, such as Delhi-Mumbai, are capped at Rs 15,000. For flights longer than 1,500 km, the maximum has been set at Rs 18,000. The caps apply to economy-class seats across all airlines and booking platforms, though airport charges and taxes remain separate. Fare caps were last used during the COVID-19 pandemic and were lifted in 2022 once demand stabilised.
Government officials said the step was necessary as IndiGo’s cancellations triggered massive supply shortages just ahead of the December peak. With India’s largest airline, holding more than 60% market share, pulling hundreds of flights a day, fares on other carriers surged sharply. Some Delhi-Mumbai tickets were selling at over Rs 28,000 on Saturday, well above typical rates. Airports like Bengaluru, Mumbai and Delhi saw crowds of stranded passengers as cancellations continued to mount.
Under normal circumstances, India’s domestic airfare system is deregulated. Airlines use dynamic pricing, raising fares as cheaper seats sell out, and are monitored only to ensure transparency in published fare buckets. But with widespread disruption and sharp price spikes, MoCA invoked its powers to curb what it described as “opportunistic” fare levels during a crisis.
Analysts say the caps reflect a balance of inflation, operating cost trends and the acute demand-supply imbalance. While the government has not disclosed a fixed formula, experts note that the ceilings align broadly with current cost structures. “An Rs 18,000 cap on routes above 1,500 km is reasonable compared to what airlines are charging this week,” one analyst said, adding that inflation and fuel costs have raised baseline fares over recent years.
However, analysts also emphasised that the move came too late for many passengers. Those stranded or forced to rebook in the past few days often paid double what the new ceilings allow. “The intervention protects travellers going forward, but a large number of people have already taken a financial hit,” said another industry watcher.
IndiGo said operations may take until December 10–15 to fully normalise, even after the government temporarily relaxed some pilot-rest rules until February 10 to ease staffing pressures. Pilot unions have criticised the exemptions, calling them a compromise on safety standards.
For now, officials say the caps will stay in place until cancellations reduce and fare levels stabilise, something analysts expect may take at least another week.
India’s decision to impose emergency caps on domestic airfares this week comes amid one of the country’s worst aviation disruptions, with IndiGo cancelling thousands of flights due to a pilot-rostering crisis. The sudden capacity crunch pushed ticket prices to unprecedented levels on busy routes, forcing the government to intervene with regulated ceilings ranging from Rs 7,500 to Rs 18,000.
According to the Ministry of Civil Aviation (MoCA), one-way fares on routes up to 500 km cannot exceed Rs 7,500, while sectors between 1,000 and 1,500 km, such as Delhi-Mumbai, are capped at Rs 15,000. For flights longer than 1,500 km, the maximum has been set at Rs 18,000. The caps apply to economy-class seats across all airlines and booking platforms, though airport charges and taxes remain separate. Fare caps were last used during the COVID-19 pandemic and were lifted in 2022 once demand stabilised.
Government officials said the step was necessary as IndiGo’s cancellations triggered massive supply shortages just ahead of the December peak. With India’s largest airline, holding more than 60% market share, pulling hundreds of flights a day, fares on other carriers surged sharply. Some Delhi-Mumbai tickets were selling at over Rs 28,000 on Saturday, well above typical rates. Airports like Bengaluru, Mumbai and Delhi saw crowds of stranded passengers as cancellations continued to mount.
Under normal circumstances, India’s domestic airfare system is deregulated. Airlines use dynamic pricing, raising fares as cheaper seats sell out, and are monitored only to ensure transparency in published fare buckets. But with widespread disruption and sharp price spikes, MoCA invoked its powers to curb what it described as “opportunistic” fare levels during a crisis.
Analysts say the caps reflect a balance of inflation, operating cost trends and the acute demand-supply imbalance. While the government has not disclosed a fixed formula, experts note that the ceilings align broadly with current cost structures. “An Rs 18,000 cap on routes above 1,500 km is reasonable compared to what airlines are charging this week,” one analyst said, adding that inflation and fuel costs have raised baseline fares over recent years.
However, analysts also emphasised that the move came too late for many passengers. Those stranded or forced to rebook in the past few days often paid double what the new ceilings allow. “The intervention protects travellers going forward, but a large number of people have already taken a financial hit,” said another industry watcher.
IndiGo said operations may take until December 10–15 to fully normalise, even after the government temporarily relaxed some pilot-rest rules until February 10 to ease staffing pressures. Pilot unions have criticised the exemptions, calling them a compromise on safety standards.
For now, officials say the caps will stay in place until cancellations reduce and fare levels stabilise, something analysts expect may take at least another week.