Why airlines have increased fares by 20.5% in June

DGCA has observed that there is a 20.5% increase in the average airfare on 72 domestic sectors when comparing June 2026 to March 2025, said the Ministry of Civil Aviation. 

Replying to a question in parliament, the ministry shared that airlines' operating costs are dynamic in nature and their individual components vary due to multiple factors such as the price of Aviation Turbine Fuel (ATF) in international markets, foreign exchange rates, excise duties, and Value Added Tax (VAT) and lease rentals.

ATF alone accounts for 35% to 40% of total operating expenses of airlines. Due to the West Asia conflict, ATF prices soared over 100%, with domestic carriers cutting down flights as part of their operational rationalisation.

It further said that several proactive steps are taken to make air travel more affordable, such as enactment of the Protection of Interests in Aircraft Objects Act, 2025 to lower interest rates and lease rentals, rationalisation of Central Excise Duty & GST on MRO components and contracts, and reduction of high VAT on ATF by requesting States/UTs, among other measures.

In order to enhance transparency in airfare, the Directorate General of Civil Aviation (DGCA) has set up a Tariff Monitoring Unit (TMU) that monitors airfares on selected 78 routes on a random basis by using airlines' websites on a monthly basis to ensure that the airlines do not charge airfares outside the range declared by them.

ATF prices were capped at a maximum increase of 25% over the 1st March, 2026 base price, effective from 1st April 2026 for April and May, 2026.